I have a very solid deal in Evanston (Chicago suburb) but some hard money lenders don't like my current liquidity.
Here are the numbers:
Purchase price: 102,000
I currently have 25,000 and 20,000 on my 401K. I'm leaning towards partnering with a member of BP who I met a while ago. And I offered him a 10,000 profit share if he funds 10,000 of the down payment and has enough cash reserves to make the HML comfortable with the deal. What's the easiest way to structure JV partnership? Should we go with an attorney? Can we form an LLC where I own 75 % of it and he owns the rest?
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@Daniel M. , feel free to pm me. I prefer not to give legal advise over a forum but if you’d like to give me a call, I can offer some suggestions and or help out.
I'm not an attorney... but there are two ways I can think of that might work with your partner being able to qualify for the loan:
1. Create an LLC with the both of you, and then state your ownership interests (percentage) in the company.
2. Have your partner be a 2nd lien-holder. He/she would have a Promissory Note and Deed of Trust, and on the Promissory Note you can state your JV terms (i.e. % of profit share or $10,000 flat amount). A lot of hard money lenders don't like having 2nds behind them though, so might have to ask your lender if they'd allow it. But this way would be cheaper.
Shoot me an email and I can connect you with a more lenient lender.
Ahmed Motiwala is the man, btw.
He does all my short sale deals.
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