Rental Property in Greeley Colorado

[Wyatt Simon]

Hello BP, 

So I am a young investor just starting out in Northern Colorado. I currently have 28k in the bank, but work on a commission only job, so I can't get a conventional or FHA loan for another 8 months or so. However, I want to get invested now.

I've had an opportunity present itself, but I would love to hear what others think before I pull the trigger on this. There is an investor in Greeley that is willing to structure a deal on a townhouse in greeley. The terms of the deal: 

- 20k Downpayment

- 1400 a month in interest

-  I have an option to buy the property at 220k at anyt time when I can actually get a loan 

- He is willing to partner with me and split expenses and profits on the rental so this is an option I could either us or not use

The property is officially a 2 bedroom 2 bathroom 1600 sf townhouse a block away from UNC, but there are 3 unconventional bedrooms in the downstairs. He believes we could rent out the top of the house for $1,000 a month and the 3 bedrooms downstairs for $500 each to college kids for a total of $2,500 a month. We would have 2 leases in play and only accept college kids without cars, so parking doesn't get congested. 

The property has been remodeled within the last 2 years and was built in 1984 so I don't expect too many problems. 

HOA is $100 a month.

So I would be cash flowing 2500 - 1400 (interest) - 100 (HOA) = $1,000 which I could partner and split with the investor as well as splitting any expenses for cap X.

Lastly, I think this is a pretty good deal. I need to read up on if I could legally rent out the top half and bottom half in Greeley. I also did some research and I believe the townhouse is worth 170k due to other comps that have sold this year and also been remodeled. 

I'm going to look at the property with the investor today. What I'm thinking is I say I'll put 7k down,  pay 170k for the property at 4.5% interest payments each month and still partner with him so he is more willing accept these terms because he'll be splitting the profits each month. 

Any and all help is greatly appreciated!!