How to structure a mid term rental deal partnering with parents

[Eric Samuels]

So my mother is retired and my father is just about ready to retire. They have had great careers and have sold my childhood home, bought a condo that they plan on moving into abroad and hope to by another home in the Philadelphia area so they can come back every now and then to be close to their kids and grandkids. They have mentioned that they'd like to make it a rental so that it can generate money while they are not staying there the majority of the time and I've suggested turning it into a furnished mid-term rental and to target traveling nurses or companies that provide extended stays to families whose homes are under construction.

One thing I don't have much experience in is structuring partner deals. I personally was hoping to do the heavy lifting when it comes to reno and potentially management while they were to provide the down payment. I know there's a lot to learn about structuring deals but would love to get some initial suggestions on how to best do that. Should I do 50/50 equity where I find the deal and renovate/manage while they put down the down payment? Would love some suggestions.

Thanks,

[Jamie Banks]

I would suggest making a list of all the responsibilities that you will have and then all the responsibilities that your parents would have as a starting point. Are your parents going to find the home and sign on the debt? Or will you find the home and handle any renovations / furnishings? It's important to make sure that partnerships are trully equal if you choose a 50/50 partnership. Start the conversation by showing your partners the sheet that has all the responsibilities listed. If you're doing 70% (for example) of the work and signing on the debt it might make sense to structure it 70 /30.