SFR partner needs to cash out. We dont want to sell or refinance, any suggestions

[Chris Nall]

We purchased a SFR rental 1.5yrs ago with a partner that put up the capital for the Down Payment ($39K) we've managed the property and maintenance. Our partner has run into some unexpected issues and would like their capital and Equity out. Unfortunately the loan is not assumable. Our interest rate is 5.5% so refinancing to buy them out isn't ideal for us, and selling the property right now doesn't seem like a smart move. Are there any creative solutions I'm not aware of to get them out, and for us to keep the property and current loan rate?

[Tim J.]

This is one of many reasons why people need to think of and document exit plans BEFORE putting money into a partnership.

Someone or both of you are going to get the short end of the stick.  Either they have to wait to get their money, or you're going to have to pay for buying them out.  Or compromise and both lose out.  

The good news is, you can exit a bad partnership early and have a fairly inexpensive lesson about partnerships.