Housing

5 Replies

Question - what would you say is the best way to go about this situation.

Long story short -

Me - Have cash, commission job, can't loan qualify

Partner - Has no cash, Salary Job, can qualify us for a loan.

Basically I am simply using him for his ability to get a loan.

$165,000 house. I am putting up the 10% down + closing - call it $20,000.

How would you structure this deal to ensure both sides win and are happy -- simply put, I need him to qualify us, otherwise I won't get the deal done.

Purchase as tenants in common, both go on the note jointly at a bank, they can probably marry the two of you financially at least. Have you tried getting a loan together? :)

Edited: You guys north of the 48th need to mention that, I have no idea what you do up there in polar bear land.

Need to ask a Northerner! @Rob R.

I think :)

What kind of deal is this? Who is doing the work? Did you mean business partner or "partner"? I'll assume the former, unlike @Bill Gulley ...

You are putting up $20k cash, he bears the financial risk if the deal goes south...all else equal, I'd say a fair profit split would be 70/30 or 60/40 in your favor since you have skin in the game and his risk is contingent.

@Bill Gulley

- thanks for the reply.

Yes the intention is that we both go on the loan and are married financially.

What I am wondering is what is the fairest way investor to investor to structure the deal.

50% equity split, and use his portion of the monthly cash flow to pay back half the down payment over the next few years is what we are thinking of doing. What are your thoughts on that?

I do agree with Adam, you have more at risk, if you live there the risk would be less but for an investment, you are taking the lion's share as you would be on the loan as well.

A written partnership agreement should also be done, address things like dissolving the partnership, death, incapacitation, profit and loss splits, how to force sale and how it is to be sold, taxes and the usual concerns.

It can be what ever you agree to, but it is your money which is worth more than credit, IMO. :)

@Bill Gulley

- Thanks a lot for the feedback Bill. I will have to work on it and figure out a way to pitch this to investors then, as I have significant cash available .. just need income proof.

Account Closed

- Partner as in business partner aha - thanks for the feedback RE: a 70/30 60/40. I will have to work on pitching that

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