FIRST DEAL: Seller Financed 6-plex in Ogden

[Jaiden Olsen]

I am currently under contract on a seller financed 6-plex in Ogden. The deal is good, and has potential to be great! After down payment, home inspection, warranty, due diligence, closing costs, etc. total initial investment is $14,000. I can take this money out of my savings account and HELOC and strap myself down pretty tight financially (but I could do it). But I have an opportunity to partner on this deal with a relative.

Since I'm already under contract, what options do I have to structure a partnership?

The way the deal is working, the seller and I will set up an LLC with each of our individual LLC's as members. This is what I'm thinking and I'd love your feedback!

I am going to establish a partnership agreement and a new LLC with my partner who is bringing the $14k. That LLC will be the member of the LLC set up with me and the seller.

I'm also wondering how I should structure the partnership; Annual returns on my partners money, equity in the property (50/50 split or 20/80 split etc.). 

In my in-experience, this seems complicated. I'm hoping that I can get a good idea as to where I should take this from the BP community before taking it to my attorney. 

Looking for local feedback: Salt Lake City, Ogden, Weber, Davis, Utah.

[Steve Vaughan]

I've never established an LLC with the seller before. Sounds all kinds of risky. Is that a major part of this SF deal? What are those terms? Can't you do a standard note and deed of trust like normal?

Another partnership LLC for $14k sounds all kinds of risky as well. Not to mention difficult and confusing. I'd put up the $14k myself if at all possible. Sounds like you can.

Most of the struggle and failure stories I see are from the investors losing control. Sacrifice for control.