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Updated over 6 years ago on . Most recent reply

Account Closed
  • Rental Property Investor
  • Austin
13
Votes |
8
Posts

Structuring Deal When One Partner is Living In the Property

Account Closed
  • Rental Property Investor
  • Austin
Posted

Working on a Duplex deal with myself and a partner. I am considering living in one side of the Duplex for a year, which is the minimum required to get a residential loan. I'd like the residential loan so we can come in with a lower down payment, and lower interest rate is a plus as well. I will also be the one managing the property.

Since I am occupying one side for a year, how would you all recommend we structure the first year of the deal in terms of how we both cover expenses/claim cashflow? Do I pay full rent to our partnership so that the investment remains the same on paper as if I wasn't living in it? Do I give my partner some form of credit in later years? Do we just bite the bullet and not cashflow in year 1? Should I ask for a little extra equity?

What have you all done in this situation?

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