BRRRR with a Partner in Houston Texas

[Darrell Wallace]

I am an investor looking for local BRRRR deals, but they have been hard to find since I have a busy full-time job in another industry. As a result, I decided to partner with a local agent/investor, who brought a deal to the table due to her network. We are 50/50 partners in our LLC and both contributed cash to the purchase of a SFH rental, which was attained below market value due to a distressed seller. The initial purchase was all cash, and it is rehabbed and now rented with a 3 year lease in place.

Based on our partnership agreement, since she brought the deal to the table due to her network, she will get all of her investment capital out first at refinance, and if there remains any invested capital left in the deal, it will be mine.  We will subsequently split the cash flow 50/50 each month, and if/when we decide to sell it, the profit from the sale will first go to allow me to get my remaining invested capital back, and then we would split 50/50 the profit after that.

So, I have 2 questions -

1. Is this a fairly typical arrangement for partnerships?

2. When I refinance, my partner (the seasoned agent/investor) said I should try and find a local lender that will allow me to cash-out refinance it with a Fannie Mae/Freddy Mac loan under my name, which would provide the lowest rate and highest leverage.  My partner is already maxed out on those loans, but I am not yet.  My question is- will I be able to finance it just under my name, but have her name listed on the title in addition to mine? 

My original assumption was that since we bought it together in cash through our LLC, we would need need to cashout refinance it in the name of our LLC so we would both have legal tie to the property through our LLC. However, my partner said I should be able to cash-out refi it just under my personal name (to get the good loan terms), and we can put both our names on the title.

Is that possible?  How is that done?  Any local lender recommendations that can do that?