Financing a deal with a partner

[Dean Moriarty]

I am working on my first real estate deal and the plan is for me to finance 100% of the purchase, and my partner will manage the rest.

The deal is pretty good, a couple that is willing to sell their house for the loan balance and keep the loan in their name. My partner and I will rent it out as rent-to-own, expecting to net about $30K when it gets purchased 2 years from now.

The money we need to put down is $5K, which I'll pay. The work will all be done by my partner, but he will not be putting any money down.

My question is, is this normal? I'm happy with the returns, but it seems strange to me because if I'm the only one putting money in, then I'm the only one incurring risk, right?

Also, if we don't rent it out right away and we have to pay out of pocket for the mortgage, would it be me paying it, or should we split it?

I'm just getting into this, so I'm using this as a learning experience so I don't mind taking on a little more risk, but I don't want to get screwed either.

What other things should I be thinking about?

[Don Konipol]

Better get it all hashed out ahead of time - real estate partnerships that are not well thought out or entered into by inexperienced investors almost always end in problems with both parties feeling taken advantage of.