Investment Property - Fix and Hold
Hello everyone. I'm new to the process and a young entrepreneur wanting to starting building wealth. Long story short my family friend is a successful property manager who buys properties in Memphis right now (I live in colorado). His proposition is to go 50/50 in a property and hold it. Now, I dont have that capital yet being 20 so my plan is to borrow private money from family in the amount of 60,000 at 7% for a year, with interest and principal due at the end of that time. The partners proposition is that I buy a property from him for 50,000 (rehab included), he will rehab it and put a tenant in it. I can either buy him out and do the deal myself (which I have to do because he only owns properties free and clear with partners and I'm borrowing the money) or I can sell it to him. I would like to buy him out for 10,000, refinance it at 70% LTV non- owner occupied mortgage over 30 years. Based on home value of 80,000 I should get 60,000 back (my initial investment) which I can pay back to my investors. I know own a cash flowing property without any of my money into it and I'll pay a property management company to manage it since I'm out of state. Thoughts? Thanks for the advice.