Advice on how to structure a partnership deal on first BRRRR
Scenario:
My dad owns an old Victorian home free and clear in an up and coming neighborhood near downtown Milwaukee that is being revitalized after falling into blight for several years.
The property is a 5 bedroom 2 bath home currently valued at around $50k and needs about $50k worth of upgrades and renovations to bring it to an ARV of approx $150k.
Our idea is for me to finance the renovation using cash on hand, offering the renovated property for rent for $1150 per month and then refinancing to pull 70% of the ARV ($105k) essentially returning both of our investments while allowing the rent to cover the mortgage, cap ex and any other expenses associated with the property.
We are both investors in income properties that provide excellent cash flow in this market but for this property we are more interested in holding it for possible equity appreciation over the next 5-10 years.
In addition to adding me to the deed as co-owner is it necessary to create a separate LLC for this one property or is it enough to have it titled and deeded in both names with each of us named as surviving beneficiary along with setting up separate checking and credit accounts for accounting purposes?
I am sure that I am unaware of or forgetting important considerations as we try to set this up so I welcome any feedback or suggestions that you may have on how to execute this if this deal make sense.