How would someone suggest to structure a partnership contract for 50/50 equity on small MFR when one party is providing the down payment and closing costs, and the other party simply being the owner occupant of the property?
I am looking to invest out of state. My brother is willing to move and be boots on the ground. We would like to use him as the owner occupant for FHA loan to get started, however I am the one with the liquid capital for upfront costs. I want him to "house hack" a quad in an area with low entry and BRRRR from there.
Suggestions or experiences getting started in long distance investing with low entry points (under 20k) and enough cashflow to offset mortgage are all appreciated!
@Jeremy L. FHA insured loans were not intended as you are describing...so no option to partner on a deal like a non-occupied property. Your option may be limited to gifting him the cash for the down payment...the decision to lend will be based on his DTI and credit...and using FHA across state lines will prove challenging unless he's taking a job nearby...plus you have minimum 12-month owner-occupancy requirements, so you won't have a quick deal here...you can apply for a streamline re-fi sooner than the 1-yr mark...
There is nothing wrong with using an FHA insured loan to get into a live-in investment, but the restrictions are tight...trying to use federally backed loans for unintended purposes will likely backfire...the fines are hefty.