Type of Partnership/Equity - How To Structure Myself + Roommate

[Zachary R.]

Hey guys! I am in the process of purchasing a primary residence over the next few months and plan to do a blend of house hack/BRRRR. Eventually, likely after the 2 year mark, we will sell the house or turn it into a long term rental beforehand. To date, I have 2 active long term rentals in the Denver/Arvada area.

I would like to structure this in a way that my roommate is also building equity in a partnership.  There are reasons for this, mostly personal, but eventually we will be partnering on a larger scale.  I'm taking the loan in my name, and placing the majority of the downpayment.

My question is - how would you guys propose that I structure the deal post-purchase? Since the loan lives in my name, the downpayment is mostly on my balance sheet, etc. would it make most sense to just transfer into another entity (LLC, etc.) with partial ownership to him? I.E. A percentage ownership with this one specific house?

I'm not sure how to go about this, but it's important to me that he shares in the eventual proceeds.  Also, considering having him pay a higher monthly rent in order to offset some of the costs associated with the downpayment over 2 years.

Any thoughts?