Working on a Duplex deal with myself and a partner. I am considering living in one side of the Duplex for a year, which is the minimum required to get a residential loan. I'd like the residential loan so we can come in with a lower down payment, and lower interest rate is a plus as well. I will also be the one managing the property.
Since I am occupying one side for a year, how would you all recommend we structure the first year of the deal in terms of how we both cover expenses/claim cashflow? Do I pay full rent to our partnership so that the investment remains the same on paper as if I wasn't living in it? Do I give my partner some form of credit in later years? Do we just bite the bullet and not cashflow in year 1? Should I ask for a little extra equity?
What have you all done in this situation?
If FHA financing I don't believe you are allowed to have an investment partner, and I believe that is the case for most loans that go to an owner occupant. If this was conventional You'd probably just subtract your rent from the profit in the way that had the minimum tax implications.