Partnering for a rental house
If I wanted to do a conventional loan of 20% down on a SFH that was intended to be used as a rental, how would you design that partnership if i wanted the partner to bring the 20% plus the closing and I would manage? Would you do 50/50 on cash flow each month and then sell the property in however many years and split that 50/50? How would you structure and what is the most common form to that partnership?
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It isn't very easy to do a partnership like that on a SFH because there usually isn't that much cash flow. If I had 20% to put down on an SFH, I wouldn't partner 50/50 with someone who was going to manage it because I know I could just hire 3rd party management for 10% of gross and keep all the equity for myself.
I'm going to follow this thread to see if anyone else has good ideas. Otherwise, I've only seen 50/50 partnerships on smaller properties go well if both partners contribute 50% of the capital.