First 6-Unit Acquisition – How Would You Structure an Equity Partnership for the Down

Hi everyone,

I'm working on my first multifamily acquisition and would really appreciate some feedback from investors who have actually partnered with private equity investors on deals like this.

The Deal

Purchase Price: $578,000

Property Type: 6 detached 1 bed / 1 bath units

Location: Panama City, FL

Occupancy: 100%

Gross Annual Income: $63,900

Current average rent: ~$890/unit

Tenants pay all utilities (separate meters)

Recent improvements include roofs, electrical, windows, flooring, kitchens, etc.

Current DSCR appears to qualify based on preliminary lender analysis.

My lender believes an equity partner would likely be a cleaner option than borrowing the down payment through a private lender, since additional debt could complicate underwriting.

They're currently working on determining the actual cash needed to close after lender requirements, reserves, and any potential seller concessions, so I don't have the final number yet. I'm estimating roughly 20% down plus closing costs and reserves.

My Role

I would be:

Finding and underwriting the deal

Negotiating the purchase

Managing due diligence

Self-managing the property initially

Executing the business plan

Managing operations and future refinancing

The capital partner would primarily provide the cash required to close.

My Goal

I want to create a partnership that's fair to both parties and encourages a long-term relationship, not just get one deal done.

I'm curious how experienced investors have structured partnerships where one partner contributes most of the capital and the other handles acquisition and asset management.

Specifically:

Do you prefer an equity partnership or another structure?

What ownership split have you found works well?

Do you use a preferred return?

How do you handle returning the investor's initial capital after a refinance?

Do you include a buyout option after a certain number of years?

Looking back, what would you do differently?

I'm meeting with a real estate attorney before closing to draft the operating agreement, but I'd love to hear real-world examples from investors who have actually structured these types of partnerships.

Thanks in advance!