How to structure a deal between two partners, one with cash and one with good credit?

[Ramez Qubain]

Hi Bigger Pockets Community, 

I have a business partner who wants to partner with me in buying a rental single-family home, however he has cash but no credit and i have credit but no cash. How would you suggest doing a Joint Venture deal that is fair to both parties and that is acceptable to the bank (conventional mortgage); i will be finding the property and will be managing it. Also for simplicity, let's assume there is no renovation costs involved. 

[Erik Estrada]

Quote from @Ramez Qubain:

Hi Bigger Pockets Community, 

I have a business partner who wants to partner with me in buying a rental single-family home, however he has cash but no credit and i have credit but no cash. How would you suggest doing a Joint Venture deal that is fair to both parties and that is acceptable to the bank (conventional mortgage); i will be finding the property and will be managing it. Also for simplicity, let's assume there is no renovation costs involved. 

You can easily create an LLC, have your partner deposit the cash into your account and qualify for a DSCR loan.

Lenders do not require bank statement seasoning nor do they source the deposit on these types of loans.