Using Family as Private Lenders for Owner Occupied Airbnb Duplex

[Adam Baur]

Hello! 

This is my first post to bigger pockets but I have been listening to the podcast for a year or two now and I am about to close on my first duplex in 8 days! 

Background

Buying a 361,000 duplex that is 6 beds 3 baths. The first floor unit (2bd 1 ba) is where my wife and I are planning on living and the 2nd and 3rd floor (4bd 2ba) will be rented out on airbnb. Using AirDNA to price out average daily rate and occupancy (232 a night at 66% occupancy) will give a gross revenue of $55,889 a year just for the 4bd unit. 

Recently our loan officer said that we could do a 3.5% down FHA loan ($12,635 down payment) using my w-2 job and 1099 job, but since my wife and I own the business together we messed up and did taxes for the business under her name in 2021 and taxes under my name in 2022 so they cant count any of the income that the business made. That means that I can no longer do FHA because my debt to income ratio is too high so we have to switch to a 15% down Conventional Loan ($54,150 down payment) which is substantially more than we were thinking we would have to pay.

So that brings me to....

Making My Family Investors

My Grandma and parents have expressed interest in investing in real-estate with me and told me that if I ever needed an investor they would be interested. Only problem is that I have never brought on investors and dont really know how to structure an agreement/contract. 

Here is what I was thinking of so far:
50/50 split of profits for those who invest just money and the person who found the deal, perform renovations,  and run and operate the bnb.

So if an investor puts 50K in and I found the deal, did the renovation and operated the airbnb we would split the profits 50/50. 

If an investor put up 50k and I put up 50k in renovations and still renovated and operated the airbnb the investor would get 25% and I would get 75%

Does that sound fair/right? Does anyone have any examples of a contract or structure that might work better? 

Like I said Im a newbie so please let me know if I should be considering something else or if you have any advice! 

Thanks!