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Updated almost 3 years ago,
Help me make this deal make sense for everyone
We have an acquisition coming together. The property will be our 4th investment property. The details of the building aren’t needed for this hypothetical but I’ll provide them anyway.
The building is a single family house 2 bed 2 bath in an up and coming saint Louis neighborhood. Price is 100,000. We will need to go conventional so down payment 20,000. We walked through and estimate rehab costs at approx 15,000.
all in will be 35,000.
Although we are liquid enough to do this deal ourselves but we have a family investor who wants to get involved. They offered to cover the down payment costs of 20,000.
What are some options for how we pay them back and make it worth their while to get involved? Obviously the deal is sweet to us as it is lessening our all in money by 20k, freeing that cash up for other things. The building will rent for 2,000 a month and all costs about 1000 (we pay utilities), profit of 1000/month.
They would provide down payment money and nothing else at all. We manage, repair, and operate.
Any ideas for how to structure this deal would be appreciated! Or is it so limited that we might as well cut them out and just fund it ourselves? Thank you very much!