Ok, so Im looking to partner up again (I have been trying to figure this out for a bit now).
41.5k for dp/closing
CF = 281/m
PITI and expenses=1017
Income = 1300
Now before everyone freaks out, I plan on getting this for 15k less but want to be conservative.
Im looking at IO payments of 193/m
8 year balloon/payoff of his 29k
At that point I plan on having his 29k with CF over the period, appreciations, principal paydown. Im putting 12450 in the deal and hope to have 60k value in the property at the end of the term and I will manage myself. But this isn't about a good or bad deal....
If we form an llc, can I write in the ability to pay him off and remove him from the llc?
@Reggie Maggard , my math shows cash flow of ($146)/month. That's negative and before paying anything to the investor. I don't see this changing with a slightly lower price.
@Jaysen Medhurst ok so not a great deal...what do you think about how I could structure a partnership (using other people’s money) if this was a good deal?
@Reggie Maggard , you can go at it from many different angles.
A private money loan. The invest or is basically the bank. You should expect to pay a higher rate, but you have the freedom to structure it any way you want, it doesn't go on your credit report, and may even do 100% LTV.
Equity partner. The investor brings the capital and you split 50/50, 60/40, 70/30...it's really whatever works the best for both of you you. Since you don't have experience, give the investor a bigger split (they're taking on more risk). Basically, cash flow and depreciation are allocated based on the split. Any profit at sale is split the same way AFTER the investor reclaims his capital.
@Jaysen Medhurst That is just fantastic help, bravo friend, well done. How do we determine when to sale or pull out funds?
ok so I'm doing the math on this equity split stuff...it basically makes me a paid property manager...as best as I can. tell...or maybe the deals in my area are just stinky right now...