Partnership structure help

[Patrick Smith]

I need help and insights from anyone who has had a partnership where the goal was to be 50/50 on a buy and hold rental property. The property is a duplex that will cash flow $212 each month. There will be $5,000 in equity at 85% LTV at closing.

My scenario is as follows:

- I will put in the cash to make the deal happen = $30,500

- Partner will take out a conventional mortgage to finance the balance. 

I have considered a couple ways of how to get my money back, but I want insights from you.  So the question is,  how do I get my money back?  (Bad deal is also an acceptable answer) 

[Matt Hurley]

$212 per unit or total? It’s a bad deal if that’s the total cash flow, especially if you’re partnering on the deal and you’ll immediately lose half. 

Will this deal BRRRR? If you can refinance and get that $30k back, do that. If not, I'd back out since you'd lose that cash for the next deal. Two things my 20+ yr. experienced mentor made clear to me on a deal like this

1) make sure both your names are on the title, or that the house is bought in an LLC which you each own 50% of. If he's the only one with mortgage in his name, technically you own nothing and are down $30k

2) Make sure you've got your operating expenses dialed. Capex, repairs, vacancy, AND management. Even if you don't currently plan to use a management company, include it in the number calc so you know if it can scale or if you'll have to take care of it forever yourself.