Hello BP fam!
I have a situation where I have a "partner" who is my private lender. Neither of us have any interest in being under the same LLC. We act independently but have a business relationship. He finances the properties 100% with a mortgage, I usually finance the rehab or a portion of it and do all of the property management, etc. This arrangement has worked out fantastic for us.
I'm running into a snag with a refinance because of the "skin in the game" situation banks like to see. To get over this hurdle, I'm looking to write a business agreement outlining the strategic partnerships between our businesses.
Has anyone ever done this?
I have an attorney that I'll be working with on the draft. I'm more interested in the feedback on those who have had this type of relationship and if/what you've documented.
When you say he finances the properties 100% with a mortgage are you saying that he gets an actual mortgage with a lender or that he is putting up the cash and securing it as the mortgage holder himself?
Also when this is done are you being put on title at all or is everything in his name alone?
I think that with you being on title regardless of whos name the mortgage is in would solve this problem.
Also what exactly is the lender saying when you are trying to refinance? You not having skin in the game I would think would be irrelevant when it comes to a refinance.
Have you just talked to the 1 lender? If so I would suggest talking to a few others and make sure that you are working with a lender that know investment loans. Pretty much all lenders can do investment loans but that does not mean the loan officer themselves have done them or know how to properly do them.