Should I be a partner or just loan??

[Ken Moyer]

Hello Everyone I hope you are all doing well and are healthy.
Unfortunately, I have a friend who is going through a divorce and asked if I wanted to take over a share of his partners stake in their property.

The NJ property is a 1936 duplex 2bd 1 bath 1200 sq ft, with public utilities, off street parking. The current tenants pay $2275 and $2300 they also pay all utilities. He feels the property will appraise at $600k which I am looking into comps to see if that seems correct. His mortgage is around $1600 per month.

The deal!

option1 He offered me an option to purchase 1/6 of the property for a monthly dividend and a return of my money and 1/6 of any additional equity the house accumulates over the course of us holding the property. Im not sure what would be an appropriate amount would be for a dividend.

option 2 He offered me an option just to loan money on the property, and receive a monthly payment at an interest rate that we would agree on. Im not sure what would be a reasonable interest rate to charge.

Im going to go look at the property tomorrow and speak to him in person.

I would greatly appreciate any advice or questions I should be prepared to ask tomorrow.

Wishing all of the BP family well during these unique times.