Multi-Family House Hack Investment - 50/50- How to Structure?

[Stephen Massinello]

Hi BP, I am looking to go in 50/50 with a partner in a multifamily house hack. He will live in one of the two apartments in the Multi-Family. 

Assuming down payment is 50/50, how do you then structure who pays what? all costs 50/50?

Let's say there is a 2 bed and 3 bed and he stays in the 3 bed? 

As I am writing this, it makes sense to me that it would be 5050 cost down the middle after the rent from the 2 bed is subtracted out of the total monthly expenses. 

If anyone has a document or any tips on this type of deal, please let me know. 

Thanks

[Drew Sygit]

@Stephen Massinello

When partnering with anyone, but especially family & friends, you want everything in writing. Otherwise, you may not be welcome at family events!

Too many investors want to partner with “handshake agreements”, which they would never do with a tenant or property management company.

Things to think about:

1) What happens if one of you is suddenly incapacitated or dies? Do the surviving partners get that investors shares or do they have to deal with relatives that may be ignorant and/or greedy?

2) What happens if one of the partners wants to terminate the business relationship and wants their investment out now?

3) What happens if one of you drinks & drives, killing someone and getting sued by the victim's family? How would the other partner(s) be protected from that?

So, why wouldn't you want to hire an attorney to create a partnership agreement and perhaps an LLC to cover as much of the above as possible?