Real Estate Agent · Philadelphia, PA · Member since 2010 · 166 posts · 23 votes
I recently purchased a buy and hold investment property. Now a friend would like to invest $15k to cover rehab costs(and split any expenses moving forward). I offered to pay 10-12% interest to him on the money if he loans it to me, but he's more interested in the tax advantages of ownership in the property (and long term equity stake) and less concerned about cash flow or initial return on his investment.
Is there any way to structure this partnership deal so he gets the tax advantages he is looking for but without giving up a portion of ownership to him?
By tax advantages, if you are referring to depreciation and other paper deductions, then yes, only as an owner, not a lender, can you obtain such benefits.
Thank you Will, unfortunately that is exactly what I thought. Seems there is no other way to make this happen without selling him a piece of the pie. It will be nice not having to pay out of pocket for repairs though.