Help Me Structure Partnership Agreement. Im bringing $15k Cash.

[Preston Patterson]

Hey everybody,

So my father and I are looking to go into a partnership to purchase my first MFR property. I am bringing $15k cash to the deal. My father is bringing $65k cash as a hard money investor. The occupied 2-unit property we are looking at is cash flowing $1800/mo. . After expenses $826/mo. will be left over.

This is how I was planning on making the agreement work:

1. Purchase the property in our Partnership LLC. name with combined funds.

2. Using an LLC bank account, collect the first 9 months of net cashflow for a total balance of $7200 (8%) of FMV (For repairs only)

3. The next 6 months of net cash flow will go directly to my father as a fee for borrowing hard money. ( $5000

4. After 24 mo. Use a HELOC to buy out the remainder of the $65k borrowed from my father +$25K to invest into the next property.

Please tell me if this sounds reasonable. Still have to research if an S-corp is the better idea for tax shielding. I don't want my father to pay income tax on receipt of repayment after HELOC. Have to talk to a tax professional about this still.