Selling half equity in current family home & turning it to rental

[Micah Cobb]

I hope this question is not too basic.

Deal Premise: My wife and I want to move from our 3bdrm house to a 4bdrm house but keep our house as a rental. To get the capital for a downpayment for the other home without selling our home, I'd like to sell half the home to a partner and co-own the rental.

Current House Details:

• ~2000 sq ft -- 3bdrm, 2.5 baths
• build 2005; original roof
• fenced in backyard
• in desirable HOA
• both HVAC units are 4 years old
• similar homes are our street are selling for $255k to $269k
• I owe $180k
• Rent for 3bd homes on our street run $1800 - $2000

Idea

I was talking to a friend the other day (he's a REA and owns rental property), and he suggested I sell half my equity to someone else and then we rent out the house together. I have another friend who is trying to accumulate more rental property and is interested in buying half the equity.

My Thoughts

This is advantageous for me, because it allows me to get into the rental game with a rental in a sought-after area in our growing town. I got this home for an incredible deal 4 years ago (15% below comps), and since then our area's property values have gone up 15%.

I also need the cash to afford the downpayment on the other house (without raiding my IRA)...otherwise I'd have to raid my IRA or sell my house.

The person interested in buying half the house is a good friend and a person I trust.

Question

• Any advice about these type of deals?
• How do I analyze the ROI for a home I bought for a family home, lived in 4.5 years, etc.?
  • Since I've lived in it and maintained it and haven't had a major issue, can I lower the cap ex and maintenance estimates from 10% each to something lower?
  • Do I count what I've already put into the home (payments and downpayment) as the cash invested? Or do I use the $60,000-80,000 I would get if I sold it? 
• How do you recommend a person structure co-owning a rental 50/50 with someone else? Should one person be the "manager" and make the decisions? Etc.?

Thanks for any help you can give.