Our First Real Estate Investment!

[TJ Lawson]

Hello Bigger Pockets World. I have done my research, read the books, and even helped manage my parents rental properties. My next step is to work on getting an actual deal together!!! I've come to these forums for some advice from other real-estate investors on what they would do in my current situation. 

My fiancée and I just recently moved down to Bradenton, Florida. We currently have a lease signed at an apartment complex, so house hacking is out of question until next year.

She has a great paying job (can be approved for a solid loan), and we both have great credit scores. We have 15k saved up for a down-payment. We are very close to the ocean, and in a very touristy area, perfect for and Air BB or VRBO property. We have looked into buying a SFH but do not have enough money for the 15-20% down payment. My parents (who have a couple doors themselves) would be willing to 'help' us. That's where my main problem is, what is the best way to structure a deal with them? I would want to do everything by the book, and use this as a great learning experience for my next private lending deal.

If my parents were to fund the down payment for the deal, what would that look like when it comes to paying them back? Or would doing an Equity split work out better? I have thought about proposing to deal to them where they fund the deal 100% in cash+ rehab cost, and then BRRRR to get them their cash + interest back.... but tbh this scares me and seems like a lot of moving parts for my first deal.

I know that if I can get creative enough, I can figure out a deal that benefits all parties involved. I am open to any suggestions, advice, or guidance. Thank you!

[Emily Howlett]

Hey TJ! Sounds like you've done a great job with your research, and it's very exciting that you're moving onto your first deal! 

The first thought that comes to mind with your parents and how to structure the deal is....have you asked them what they want out of a deal? If they're looking for long term growth of their funds, maybe an equity split would be a better arrangement. If they're looking for a shorter term timeline, you could do a cash + interest with a cap (for example, they pay cash up to 200k, and anything extra you pay out of pocket). That allows you to know what your budget is, and it gives them the knowledge of a return on their investment with a maximum risk. Granted, you'll need to budget well and probably add in a buffer, but it's possible. Remember that even though it might seem like a lot of moving parts, you can still break everything down into small, independent pieces and track everything so you don't get lost in the whirlwind :) 

Whatever you do, just make sure you have everything in writing and spelled out incredibly clearly. That makes it easy to help everyone agree to down the road if they've forgotten a piece of the agreement.