Equity Partner on a New Build
Hello Bigger Pockets Community!
Background:
My husband and I recently purchased an SFR in Seattle, WA on a ~7,000 sq/ft lot. We were able to acquire significantly under market value from a family member. With the zoning, we had the opportunity to completely level the property and build 6-7 rowhouses but would like to keep the SFR (built by my husband's great-grandfather) in the family, cash flow monthly and pass it down to our son in the future.
Plan:
Our plan is to build 2-3 rowhouses in the backyard and rehab the SFR into a duplex. Zoning is LR2 (M1). We believe we have the equity to fund the build for the back units based on the ARV but are now on the hunt for an equity partner to front costs to get the project rolling. We have already found a builder and are getting bids from architects' at the moment. We want to do all preliminary work for the SFR remodel but will not be starting the remodel until the rowhouses are complete. Exit strategy is to keep the duplex as a long-term rental and sell the 3 rowhouses fee simple.
Equity Partner's Role:
Provide funds for preliminary costs such as MHA Fee, architect, permitting, surveys, plans, etc. for the rowhouses and the SFR-Duplex. Essentially everything up to the build (very rough estimate of around 250K).
Payment structure of this equity partnership would be 20% of total contribution to be paid out upon the sale of the rowhouses.
Would love any feedback on this, leads and/or to chat with someone who has experience going into equity partnerships on a project like this.
Thanks!