Partnership Advice Needed

[Matthew Reid]

My buddy and I want to start buying some rental properties and he wants it to be a 50/50 partnership. He has all the money and I have the area expertise along with many contacts. His proposal sounds okay to me but I'm wondering what the BP community thinks.

EX: The property cost 139K and needs 41K in repairs. My partner will put up the cash; 90K for him and he'll loan me 90K at 6%. He says that I can pay interest only until I can pay the principle, which without a term I'm not really sure how it would work. We'd obviously have to iron that out.

I would be in charge of all maintence and he would be in charge of finding the renters. We would hire an accountant, etc. We're thinking this will be a vaction rental. It should have a NOI of about $23,800.

Please weigh in and let me know your thoughts on the basic structure of the partnership. I'm happy to answer all questions. Thanks BP!

Matt