Updated over 7 years ago on . Most recent reply
Partnering on deal with one other person
Hi BP,
I'm planning on partnering with someone on a future deal, the issue is they will be the one supplying the down payment which will roughly be $50-70k. We're going to do a simple 50/50 equity split on the ownership of the property and I'm offering him a 10% return each year based on the rental income.
My question is on the paperwork... since he's the money guy, are we basically going to go to the bank and have both our names on the deed? If so, would that also be the case if we instead wanted to do a 70/30 split on the ownership of the property? This part of the process is a little vague, any insight would be very very helpful.
Thank you!
Christian
Most Popular Reply
Hey @Christian Nachtrieb! The borrower would be the entity. The lender would require a guarantor. Usually, all members of a the borrowing LLC with ownership >50% must sign the personal guarantee; basically personal guaranty is required for each owner of 50% of more. Some lenders do this if you own 20-25% or more. Also, most likely, the lowest of all borrowers' (the LLC's) representative credit scores will be used.
- George Despotopoulos