structuring a "buy and hold" deal with private lender

[Christine C.]

Hi BP folks!

I am hoping folks can chime in with their experience (or perhaps creative thinking) to help me create a financing proposal.

i recently found a duplex i want to offer on. I will occupy 1 of the 2 units (refurbing 1 unit immediately for tenant and the other unit while i am living there.) My REI strategy is "Buy and Hold". It is in a good nabe and will be a strong income property when i move on from in it (guessing 2-3 years timeframe); in the meantime i will live for FREE (all in costs, including rehab) while I work on my REI skills and portfolio.

A family member has offered to give me cash for both the home and rehab costs (about $85k total); he is only looking for a modest return on his money or some equity in it (his real focus is to help me realize my first REI property!) He's asked me to propose somethig fair and equitable. The only financing structure i know is bank financing. My lender isn't going to go for a 30-year term, If i reduce the term a lot, my payments are significanly higher and it wont yield the kind of upfront cashflow i'm looking for the first 2-3 years (bascially, for me to live for FREE!) i really don't want to deviate from my "buy and hold" invesment strategy. My lender is open to all proposals. he doesn't want to be involved in the property at all, so i will be managing it. Does anybody have any ideas on how i might structure a deal that is fair and equitable? thanks!!!