Using Partner to Qualify for Loans/DTI?

[Daniel Dietz]

Hello,

So far, we (3 way partnership/LLC) have bought all of our properties using cash from our SDIRAs, or commercial blanket loans with 20% down, and a few non recourse loans using SOLO401Ks. These are all for long term buy and hold rentals that we self manage.

I am thinking about buying a few more properties either on my own, or with a new partner (the other existing partners are not sure how much bigger they want to get) To do it on my own, I am running into DTI issues to qualify for FHA etc.... I also have only a finite amount of funds as far as down payments go.

So, I have considered taking on a 'new partner' that would be more of a 'silent partner' in order to get long term fixed rate loans since he has a very high income and low debts, and possibly to contribute to the down payments too. These might be cash funds or retirement funds. 

What would be some of the typical scenarios as far as profit or equity splits go for some of these situations;

• Conventional Loan
  • I provide down payment of 25%, partner qualifies for loan but puts no cash into deal. I do all day to day management..
  • We each put in half of the down payment, partner qualifies for loan, I do all day to management.
• Portfolio Loans
  • Partner puts down 10% to 20%, I put down $0 but do all day to day management.

What I am wondering is what would make sense in either a long term buy and hold together for say 15 years +, or also if there is a good way to 'cash the partner out' in say a 4-7 year window with a good rate of return.

Thanks, Dan Dietz