HOW TO BUY MY BUSINESS PARTNER OUT

[David Morphew]

HELLO NEW TO THE BP FORUM,

MY BUSINESS PARTNER AND I HAVE A RENTAL PROPERTY TOGETHER, THE PROPERTY IS A SINGLE FAMILY HOME 3 BED 2 BATH IN LONG BEACH CA . CURRENT MORTGAGE ON THE HOME IS 405k -MARKET VALUE ON THE PROPERTY WAS APPRISED FOR 670k IN AUGUST 2018 / OCTOBER 2018 PROPERTY HAS BEEN UPDATED BACK YARD LAND SCAPE WITH SPRINKLER SYSTEM AND SOD , DIVIDING GATE FROM LAWN AREA TO ENTERTAINING DECK ALONG WITH 2 FRONT PRIVACY GATES ADDED TO THE FRONT OF THE PROPERTY TO UPDATE THE LOOK FOR THE HOME . INSIDE KITCHEN CABINETS HAVE BEEN PAINTED A FRESH WHITE OVER OLD OAK CABINETS FOR AN UPDATED LOOK . JAN. 2019 MY BUSINESS PARTNER ANNOUNCED HE WOULD LIKE TO BE BOUGHT OUT FROM HIS SHARE OF THE INVESTMENT WHICH WAS HIS ORIGINAL $200k NOT ASKING FOR ANY EQUITY THAT HAS BEEN MADE IN THE LAST 2 YRS . THE CURRENT MONTHLY NOTE ON THE HOME IS $2922.75 A MONTH .. (WITH TAXES AND INSURANCE INCLUDED ALONG WITH A PMI INSURANCE OF $264.71 EACH MONTH ) CURRENT RENT VALUE ON THE PROPERTY IS $2750 A MONTH LEAVING A NEGATIVE $172.75 EACH MONTH WITH MY SELF BEING THE PROPERTY MANGER FREE OF CHARGE . WHAT WOULD BE THE BEST OPTION TO BUY MY PARTNER OUT FOR THE $200k FROM HIS ORIGINAL INVESTMENT. THANKS IN ADVANCE FOR ANY RESPONSE.

[Aaron Lee Murphy]

@David Morphew 

If your business partner doesn't want any equity and is only looking for his initial investment of $200k...then I would sell the property for the $670k (appraised) and buy him out. You're already in a negative cash flow situation. so whats the point in keeping it. Take your cash investment and your equity and move on. That's a win for you.

Good Luck!!