3 Partner Structure For Mansion and Rental Property Flip
Hello Friends. Heres the scenario:
My Father, another partner and myself are looking to acquire a unique property. It's a waterfront mansion built in 1888 on 5 acres with 10 rentals only 1 of which currently rented, 1 owner occupied, with the potential for 2 more provided we subdivide and build them out. The project needs a fair amount of work, roughly 100k-135k in rehab costs. Appraised value is 560k, ARV roughly 700k, entertaining an offer for 430k. I will have harder numbers by the end of the weekend. There is a lien for 94k in back taxes. The initial idea is to hold on to it, refinancing after a year. We should be able to get it cash-flowing $1,400 per month within 60 days from acquisition. (Some of the units are in decent shape and only require cosmetic repairs).
1) What structure do you think best? A 3 member LLC, 3 Separate LLC's, or something else? (Also, I currently live out of state, the project and both partners are in NY, I live in TX, we all have at least 1 LLC currently.)
2) We have the 87k-100k in hand for down payment, however we need to find the best way to finance the additional principal, as well as the rehab costs. What are your ideas?
Any input with sound reasoning is much appreciated. Thanks!