Partnership Model - do you think this would work out?

[Stefano Grottoli]

Hi everyone! As I'm new to real estate investing and to BP, I've been reading and educating myself a lot before going into anything solid, but I do want to start as soon as I feel ready to.

Sorry if this post is really basic, but wanted to hear your insights and ideas on this.

I currently have around 20k to invest only and a really good access to credit, so I've been thinking a lot on how to make a partnership with such money work for both me and my partner. So I thought about a strategy and wanted to hear your thoughts on this if this makes sense or if doesn't.

I'd like to start with a flip, and my main concern would be about renovation costs, as they usually are not included in mortgages. So I thought about a partnership where I would come up with the mortgage to buy the property, and my partner would come with the money for the renovation. So just an example (of course these are rough and hypothetical numbers just to exemplify the idea, and not the numbers)

Purchase cost of the house = 100k (I can make a 20k down payment, and finance the other 80k).

Renovation costs = 40k (which will come from my partner)

After repair value = 200k (sticking to the 70% rule just for an example)

In this example, that would give me 71% of the partnership and 29% to my partner giving us roughly (just some HGTV calculation, but I do know there are lots of other costs, but again, I just to exemplify the strategy) 43k of profit to me (after paying out the whole mortgage) and 17k of profit to my partner.

Do you think this would be a doable strategy? Do you think this can work? Am I missing something here? Again, I do know that there are several other costs to consider (holding costs, closing costs, fees, insurance, etc, etc ), and market conditions, etc. Just need your inputs in the partnership model.

Any thoughts will be greatly appreciated. 

Thanks!