First Property - Friend Financing Offer

[Scott Gordon]

TLDR: How do I handle an offer from a friend to make the cash deposits (down payment, closing costs, renovation costs)? I love the idea of my money staying out of my first deal, but want to understand if anyone has done this before, how it worked and how you managed the legalities behind it (plus mixing friendship with business).

Hi All - I have spent the last 4+ months reading and learning about personal finance/real estate investing more specifically and am about ready to jump in and get my first property. I do have the capital to do so on my own, but would basically be using all of my money I have set aside if I did so. I have a friend who has been raving about real estate for the past 5+ years but he is the type that just goes off of what he sees others doing and what they tell him to do, but never takes the time to read/learn on his own so he has never pulled the trigger and got into it himself.

Now that he knows I am interested and ready to get into it myself, he's asked if I would be interested in partnering up. I know he wants to do this because he realizes I took the time to learn everything and all he would have to do is split the cost and reap the benefits. I told him I wasn't interested in a full partnership long term, but am considering private lending at least for my first property to keep the money I set aside readily available in the case of any emergencies. He was really interested in that, and said that he wouldn't expect a 50/50 split, but basically that he'd get his money back plus 10-12% (more than what he'd get on the stock market and in the mean time he would love to help me manage the property so he could learn hands on. He works overnight so he would actually be helpful during the day if I ever needed something done. I think he is wanting to prove he could be a valuable long term partner potentially.