Private Lending from Family

[Sofia Sendra]

My husband and I are looking to invest in real estate, but don't have enough capital to get started. I have a family member I want to reach out to to get into business with together, as he has expressed an interest in real estate investing as well. 

Our Business model would look like this: the family member putting up the money for the down payment, and my husband and I would be in charge of finding the deals, working the deals (we're both realtors), rehabing, and managing. 

Is this a sustainable business plan? If so, how would we go about splitting the profits with our $ providing family member?  

[Dave Skow]

@Sofia Sendra- thanks ..are you planing to  buy an investment property  or a  primary residence to  begin with ?  .assuming that you will need a loan / financing  to acquire the  first prop- I would recommend that the three of you  get  a  loan pre approval  for a hypotehtical  transaction  completed  in order to  determine if you can obtain a loan... as gifting funds  isnt allowed for investment  property purchase - your relative will need to be on the loan as well ....however you decide to split the  profits  (and to  cover the additonal costs ) - make sure all  scenarios are  formally  addressed  in writing  ...it might be worth meeting with a real estate  type  attorney  familar with  investors