Partnering with a person who can use VA loan

2 Replies

Hi all, This is my first post. Trying to pyrchass my first real estate investment property. Read Brandon’s no money down book and figured that in my situation without a lot of money to put down and unable to apply for a loan under my name. The creative strategy I came up with is: 1) My VA friend is looking to find a place of his own. 2) he can apply for a VA loan which is 0% down, 100% financing, no PMI. 3) he can house hack a 4 unit property and live in 1. 4) I can put together the deal and manage the property. 5) SPLIT 50/50 Partnership QUESTION: Form an LLC PARTNERSHIP?

@Barton Louie - So you are proposing partnering on a property management business, not a property, right? Just asking because 50% of the management fees on 3 out of 4 units isn't very lucrative. Are you sure you can lease and manage rental property without a license in your state? It just doesn't seem logical to take on the expense of an LLC from and expense standpoint for such little income. This is a guesstimate on the numbers - $750/month income on the 3 units. If the management fee is 10%, that's $225/month if all units are full. Divide that by two and your income is only $112.50. Someone would have to do the books for the LLC, and you would have to have insurance for the PM company and pay to have a tax return done. Doesn't make financial sense.

@Patti Robertson Hi Patty, thank you for your response. Here is a hypothetical situation. Let me fill in the numbers of a property here in the Bay Area that is pending now. $550,000 purchase price Expenses- approximate monthly mortgage $2,200, 10% monthly management fees = $420, other expenses $500 Income = $4,221 for 3 unit, 4th unit for VA friend to house hack. 4 unit - 1 will be for the friend 3 other units: monthly rent AccordIng to rentometer 2 bed/ 1 bath = $1,600 2/1 = $1,600 3/1 = $2,021 Total = $4,221 - $2,200 and other expenses ($500+ 420 for managemen fees) = $1,080 monthly cash flow approximately $1,080/2 = $540 person? This is a hypothetical. I would definitel use the calculators and analysis forms on BP to get all more accurate Numbers. Total