I am a part time investor with a specified niche aporoach. I buy 1-4 units properties in Wyandotte County KS where I used to live. I know the community, rent rates, and housing prices. I turn them over to my Dad who still lives with 2 minutes of my target neighborhood and he manages them for an agreed upon percentage of the rents for total management. I am able to be out of town and hands off except for large repairs after the purchase.
I want to buy more buy and hold duplexes, but I recently lost my W-2 job. I have cash set aside for reserves and a new down payment and I will maintain on my other rents until I pick up a new gig.
I am curious what other investors have done in this kind of situation if they want to keep buying.
I have 3 brothers who l could be partners on an investment. Teo live in a market with crazy high standard of living costs. So housing prices in KC sound like child’s play to them compared to where they live.
I need a partner to take out an investment property loan mortgage to do another duplex or triplex or fourplex since I don’t have the W-2 income to get another one right now. I see several deals I want to make a move on, but I am unsure how to fairly structure a deal. If one partner is putting his credit on the deal to make it fly with the bank but I put up some or most of the down payment, what’s a fair split on the rent profit at the end of the year?
What’s credit worth?
In short what should I offer if the other partner is just using his credit to make the deal with me? 75\25 split? 50/50 or 80/20?
What does the seesaw look like? If I put up all the down payment, what should I cut them in for?
Also, I am the knowledgeable one in the family pricing the deal and showing them how we evaluate each potential investment, what’s that knowledge worth?
Anyone else who has done partnerships have thoughts?
I am only considering doing this with my immediate family as partners, my brother/brothers and Dad as manager since he is already managing all of my units.
@Christopher J Lemmon - I love the idea of partnerships. Have you spoken a bank that'll provide you the scenario you laid out? Most banks I talk to require a 1.25 DTI and without a W2, I'm assuming your potential partner will have to do more than provide their credit score, like be responsible for the loan.
@Jay Helms - Yes, I am thinking may partner would be my brother, if can talk him into it and he would have the loan on his credit too. So it would be co-owned. But in that scenario I am trying to think through what is fair if one person puts down the down payment one supplies the credit on the application, and one person prices the deal and organizes the buy.
How do you value those aspects fairly?
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