Add a partner for equity in exchange for cash

[Brandon Eleazer]

hello BP,

For those who've owned rental property outright...here's a scenario:

Single family 3 BR currently rented for $1150 per month.

Purchased cash for $50k + $12k to fix it up. With settlement fees and insurance the total all-in cost is $70k.

Would like to tap into the $70k cash invested either through a lending institution (mortgage, line of credit, etc) or taking on a third partner (already owned by two individuals)

Under what terms would it make most sense to add another partner?

I was thinking a $40k buy-in, in exchange for equal (1/3) partnership. This is under the condition that we will cash out refi shortly after and the partner will immediately get back up to $20k of the initial $40k....so in essence we will end up equal owners with a mortgage on the investment property and the new partner only really is out of pocket $20k.

Is this way too off base or somewhat of a realistic scenario? Thanks!