Looking at partnering with my dad

[Scott Rosslow]

I have been looking for a while for some buy and hold small multifamily units. I grew up helping my dad fix and taking care of rental properties. His strategy was different than the approach I want to take. He bought everything in cash and never carries debt. I want to leverage where I can. 

I recently came across 2 4-plex buildings next door to each other that have value add potential that are listed 1 million (price seems absurd) total in Palm Beach County. The current rents are a little over half what appears for the area. Using the current rents to justify a purchase price my offer would be 415k roughly. I am still working on the renovation costs but they would be somwhere 40-100k (I know its a wide range, and I need more detail, I havent seen the units yet).

My question is this: I have always wanted to use my dad for at least a partial financing (smaller financing for down payments + conventional financing). I think my dad more or less wants to partner and form a LLC so that I can review deals with him and then go make cash offers. Should I partner, buy, renovate, rent, and refinance attempting to make him whole? Is an LLC the right choice? As a newbie investor I wanted to get something <200k which I qualify easily for financing so I could learn somethings and scale it out from there. I haven't really been educating myself on the partnership/private funding side of things at this point.

[Thomas S.]

You need to start at square one by doing extensive research through web sites such as this one. There are plenty of videos, blogs and pod casts to go through and thousands of threads to research.

You need to keep in mind that you and you father have much different approaches to investing at this point in time and until you come together on your approach it is unwise to assume you can partner.

Your father is ultra conservative and will produce very low returns where as you are attempting to maximise returns through leverage. There may be no meeting of the minds.