Partnership Buy and Hold Split

[Rob Riggins]

I want to partner with someone I know on a 4-family purchase. They would be on the mortgage to provide owner occupancy for FHA. I will provide all cash for down payment / closing costs / upgrades / ongoing maintenance / etc. I would also utilize this individual as an on-site manager.

What is an equitable ownership split? Should they benefit from the positive cashflow? Get reduced rent? 

I'm not sure what is fair so would appreciate any real-world experience or thoughts that folks may provide. Thanks!

[Jake Kellerhals]

If her name is on the mortgage, and yours is not, then isn't SHE the one ultimately at risk with the property? Your risk is the upfront cash, hers is the 96.5% mortgage, correct?

If you ask me, she is providing you with a benefit, why not make it a win-win? If she is saving you 16.5% upfront, why not give her 10% of the equity? Would be a great way to get your family member started off on the right foot, and you still own 90%. Plus if she has some equity, she will treat the place like her own (because it is) and you'll benefit in the long run.