Inheritated property, best investing strategy

[Hannah Calkins]

I have a cousin, who is a contractor, and we have been talking about wanting to work together and get into real estate investing. I have spent the past year listening to podcasts and reading books trying to educate myself a little bit. Once I felt prepared I planned to approach a wealthy family friend to be my investor. Coincidentally, This family friend recently inherited a property.

The property is a decent size, has a fantastic location, it's zoned to be used as residential property or a business, and actually is set up as a residential property with a storefront. I have not visited the property yet but I have been told it needs some pretty hefty repairs. 

The appraisal for the property came back at $800,000 and there is a $70,000 mortgage on the property. The family friend isn't exactly sure what they want to do with the property yet, so I approached her letting her know that I really wanted to get into real estate investing I just needed an investor. She said if I came up with a solid plan she's all ears. 

I am excited but there are MANY things I need to get in order. Like organizing this partnership making sure all 3 parties are protected, figuring out the best strategy for this property and how to continue to grow, etc. Not to mention I am worried there are things I am missing or not thinking about. 

What would you recommend my first step be? Organizing the partnership and presenting that to her then moving to the property, or start looking at the property, figure out the most profitable strategy, then move into organizing the partnership? 

Any tips would be helpful! 

[Bill B.]

You’re going to have to figure out how you’re going to pay for your half of the $800k. Get a loan? Make payments to your family member? Don’t forget. This your your family members one chance to sell tax free. So maybe that’s their best call and then to invest in something they know better or to plan for their own retirement. 

[Basit Siddiqi]

I personally think you should invest on your own before you take capital from other people / investing using other people real estate.

Experience is important in this space.

[Carlton B.]

@Hannah Calkins

This may not be what you wanted to hear but educate yourself about REI, this site offers more then any college degree. I'm in the Biggerpockets multi-family boot-camp, and it is worth every penny. As far as the property in question you could pull out some the equity and reinvest or sell out right but there will be tax implications unless you 1031 into a new property. So there is a bunch of things you could do but it depends on what you want safe and passive returns or more risk and more aggressive returns. Either way start educating your self so you can make informed decisions.