I now live in Texas, but have roots in Buffalo, NY. I already own one FHA financed duplex there. I'm looking into a partnership with a friend who still can take out an FHA loan to buy a property. I have the money, far more experience managing a rental, and connections to various contractors, he has none. The general plan would be this: He takes out an FHA loan in his name on a quad, I pay the for the down payment and closing costs. If there are repairs we would either take out and FHA 203k loan, or split the improvement costs. He would live in one of the units and manage the day to day activities, I would assume a consultant role while he gets his feet wet. The idea as of right now is to hold the property as the FHA loan allows for the highest, low cost margins on a rental property. Any suggestions on how the equity should be divided in this venture?
Lawrence Rutkowski, Real Estate Agent
Not sure how the bank would look at your gift to your friend...would you consider the same deal with you on the title and split 50/50?
Looks like a great deal for your friend. He gets everything and you take all the risk. On top of that he eats into your cash flow unless you are going to charge him monthly rent. The worst part is unless your name is somewhere on the property he owns it all. If your name is on the property you likely will not be able to qualify for FHA loan. To much trust and risk involved.
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