How to finance a loan for a 5 unit Duplex
My girlfriend's dad approached her the other day and asked her if we would be interested in being partners with him and being the property managers for a 5 unit duplex. I have been wanting to get in the real estate rental business for a while now and have been looking through the forums here, listening to the podcast, researching strategies, and have read several books to expand my knowledge on real estate and the does and don'ts. Her dad has been in the real estate game for 30+ years and has units all over town and has built 40+ houses throughout his career so he knows the game.
He already has the plans approved and owns the land so we just need to get a loan, which all of our names will be own. We will split the deal with 60% to him, 20% to my girlfriend (his daughter), and 20% to me. He said we would need to obtain a 1 million dollar loan to finance the deal and the interest rate would be 6%. He wants it financed for 15 years and use the money we make to pay off the loan ASAP. I'm worried that the payments would be too much and was looking at more of a 22-25 year loan so he could pay off the principal faster but I'm not educated enough on this to know what the best way to go about it would be.
I'm just curious what the best way to finance the loan and for how many years would be best. Do we need to refinance the deal after a certain amount of years? How can we pay off the loan and start getting cash flow the quickest? Any questions and/or suggested are much appreciated.