All Forum Posts by: TJ Lawson

Although HOA dues can look like a major cash-flow cutter, sometimes they work out well. Example: You are investing out-of-state, and know that you are going to need to hire out lawn care, general maintenance, etc. An HOA that covers Lawn, outdoor maintenance and cable+ internet could be a good fit. As an investor, you get a bundled deal on outsourced work, and a tenant would be more likely to chose your property for the cable+ TV package (or you can charge more for rent)

If the numbers work, they work! Just my two cents!

I am in the process of completing my first real-estate deal!! I know… exciting right?

I am partnering up with my parents on this first one. They have agreed to split the Down payment, closing costs, and any up-front capital needed to make the property rent ready.

So we would be 50/50 down-payment, 50/50 equity split, and then an 80/20 cash flow split in favor of me because I will be handling all management.

For this deal to work, what would the lending process look like? Would we both have our names on the mortgage? (My parents have a better credit score than me, so maybe only having their names attached to the mortgage would be best?) If I did this, what legal document would show that I have 50% equity in the property?

Thank you in advanced for an advice given!!!

Thank you for the insight. Being that it is family, I would prefer not to borrow that large chunk of money. In response to your question of "what do my parents want out of the deal", I would say they want to help me get into real-estate, but also make some money in the process! I think a longer return on a smaller amount of money would work the best for us. Let me run this deal by you or anyone else and see what you think...

My parents and I would split the down payment on the property, 50/50. We would then both have 50% equity in the property. Since I do not live in the same state as them, I would split all future cashflow 80/20, because I would be doing all the management, marketing, and labor. 

From that point, would it be in my interest to write something into our agreement that gives them an exit from the deal? For example, once we make enough payments on our Mortgage and have 70% total equity in the property, the property would be refinanced solely into my name. 50% would be taken out of the refinance in cash and paid to my parents. This would then mean they are completely out of the deal. There would still be 20% left in the property for me on another long term bank loan, in which I pay off using property income and I keep 100% of cashflow. 

This is a very new and theoretical idea that I need help picking apart. Is it normal to split up equity and cash flow in partnership deals? Would a partnership that involved splitting a down payment 50/50 usually just split the cash-flow 50/50 as well? For the deal to work, I would need some sort of compensation for being hands on in the property and managing the AirBnB space.

Hello Bigger Pockets World. I have done my research, read the books, and even helped manage my parents rental properties. My next step is to work on getting an actual deal together!!! I've come to these forums for some advice from other real-estate investors on what they would do in my current situation. 

My fiancée and I just recently moved down to Bradenton, Florida. We currently have a lease signed at an apartment complex, so house hacking is out of question until next year.

She has a great paying job (can be approved for a solid loan), and we both have great credit scores. We have 15k saved up for a down-payment. We are very close to the ocean, and in a very touristy area, perfect for and Air BB or VRBO property. We have looked into buying a SFH but do not have enough money for the 15-20% down payment. My parents (who have a couple doors themselves) would be willing to 'help' us. That's where my main problem is, what is the best way to structure a deal with them? I would want to do everything by the book, and use this as a great learning experience for my next private lending deal.

If my parents were to fund the down payment for the deal, what would that look like when it comes to paying them back? Or would doing an Equity split work out better? I have thought about proposing to deal to them where they fund the deal 100% in cash+ rehab cost, and then BRRRR to get them their cash + interest back.... but tbh this scares me and seems like a lot of moving parts for my first deal.

I know that if I can get creative enough, I can figure out a deal that benefits all parties involved. I am open to any suggestions, advice, or guidance. Thank you!