dad wants to invest in our rental - pros/cons?

[Al Liao]

Hey folks, Dad wants to put his money to work and act as a 'bank' for our rental.

Agreement:

- He gives us $200,000 and pays for half the property tax

- We split rent with him

Numbers:

- PITI today is about $2600

- Property tax is about $6,000/year

- We have roughly $420,000 left on the mortgage

- Rental will be about $3200

Other quick facts:

- Rental is California

- Single family home

- We've only owned it for 2 years and plan on keeping it as long as we can hoping that things continue to appreciate in the long term. Cash flow would be a cherry on top but not what we're optimizing for here.

- We have a massive mortgage to pay on our current primary home ($1.3M)

Questions:

- We haven't defined a timeline for when our agreement would stop. It's open-ended at this point and I'm not entirely sure how or what metric we'd use that's a win-win for both sides. How should I go about navigating this? Or would it be better to keep it open-ended, "the agreement will end when we sell the home or when both parties mutually decided to stop?"

- ^Assuming there's an indefinite timeline, how would I calculate the ROI on this? On paper it seems like a good move to get an injection of cash that we could use to pay down some debt on either this rental or primary.

- Any other comments/suggestions so that nothing gets weird with my Dad?

Thanks bp fam.