Partnership advice needed

[Reva Gorbaty]

My friend and I are looking to partner on a small multi family building. We would be purchasing the building as a house hack for myself and going in 50/50 on the down payment. Probably using a 30 yr conventional mortgage with 5% down. We would split everything 50/50.

My questions are:

do we both have to be on the mortgage or on the deed?

If I am living in one unit for less than market value is it better I pay market value and then split the cash flow or just save on my housing expense and she would collect some cash flow?

What are some options for structuring our partnership?

Thanks in advance for any advice!!!!

[Steve Morris]

You could also set it up as a LLC and let the operating agreement dictate shares. It might be easier to change down the road if you need to (like one buys the other's equity) and easier to finance.

In any case, if you're putting in 50-50, you need to protect each other's interest and responsibility for the property.  On the loan as joint, you'll be joint/severable liability which means both or either are responsible for the whole payment.

Then again, ignore me and pay for an atty, it'll be the best ROI of your funds.