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Updated about 2 years ago on . Most recent reply

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What's a good way to structure a deal with a family member

Posted

Hi all! I'm just starting real estate investing and trying to figure out how to work a deal with a family member that has the cash.

I'm thinking something like this.

- I find a good deal on a single family that needs a lot of cosmetic rehabs (I can do that) but has good bones and is in a desirable neighborhood

- Family member puts up the down payment and sets up the mortgage

- I live in the house for one year and fix it up while living there, using my money. I also cover the mortgage expense while living there

- After a year is up, rent the house, and the rent would go towards the mortgage. I would manage the rental.

- Rinse and repeat

It would be a 50-50 split on equity.

Has anyone ever taken this approach? Does it sound fair and reasonable?

Most Popular Reply

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Eliott Elias
  • Investor
  • Austin, TX
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Eliott Elias
  • Investor
  • Austin, TX
Replied

It's dangerous bringing family in. Especially if both of you are newbies and neither can steer the ship. I would make sure the deal is killer before getting into anything. 

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