Hi everyone,

I am 24 years old have been on and off of Bigger Pockets for a bit as I save up for my first home. I am 24, live in Seattle and just closed on my first home. The property is a single family home with a separate entrance into the unfinished basement which will be converted into another unit. While I am very excited about this purchase, there are some complications. This is where I desperately need you guys' help.

Before I bought this property, I worked for two years to save up enough for a down payment, closing costs, and 3 months worth of reserves. I am purchasing this home and have had the plan that my brother would live in it with me and help me pay the mortgage. The mortgage is roughly $4,000 so it will be split $2,000 for each of us. This is where things get hairy.

We had the idea that I would grant him partial equity in the property for paying half of the mortgage. I decided this because fair market value for rent on the entire house is roughly $3,000, which would make his portion of the "rent", $1500. So he is over paying by $500 to live here rather than rent at market value. I know this is not traditional as the whole point of house hacking is to have someone help pay your mortgage rather than give someone part of your home. I have also told him that we would split the renovation and whatever percentage of the renovation each of us pay, then we will retain that percent in equity depending on the increase in assessed value, post renovations. It has come to my realization as I put up all of the money I have worked so hard for, that he has no skin in the game. My name is on the title, not my brothers. And I worked everyday, ate almost every meal at home with cost effective foods and sacrificed 90% of my social life to be able to save the way I did. (Prior to graduating college and getting a full time job, I was an incredibly social person, so this was a huge change of mindset to sacrifice the way I did).

And on the other end, my brother decided to start his own business while I was working and did not work hard as he spent money like crazy and eventually went bankrupt (filed 1 year ago) . He is now doing well and getting back to where he needs to be. But I just feel like I am losing at my own investment by giving so much of the opportunity up to someone that did not do what I did to make this possible.

As of right now we have agreed that after renovations are done, if I were to have put more money into it than he, then he would repay me the amount to become 50/50 partners on this property. This essentially means that, during renovations, he has the opportunity to bring himself all the way up to 50/50 partners with me, or close to it.

What does not sit right is that I have created this whole opportunity and would like to feel compensated by retaining significant value in the project rather than opening the doors for losing 50% of my investment when I am certainly able to do it on my own. Can anyone help me out on a way to explain this to him without hurting his feeling or give me an alternative way to still make this seem like a valuable option for my brother without giving up such a significant portion of the equity in the property? While I told him already I will never cut him in on a deal out of "being my brother" I think it is right that I grant him some sort of value because he would be over paying on rent by $500 by living here and I have already told him I would give him an equity split, far more than what I will actually end up giving him in the end. This is my first investment opportunity and I have made mistakes and I need help trying to resolve them appropriately.

If any of you would like see the contract I have written up for this, please contact me and I can explain it more. A phone call might be nice too, so I can explain any further questions you might have.