Need advice on this situation

[Zach Ziskin]

Hi all,

Well, it looks like I may have found my first real estate investment deal! It's a four plex in Pittsburgh, PA (I'm based in South Florida). I've attached a photo below. It's an up and coming neighborhood, but not a war zone at all. In addition, a brand new casino is being built nearby, as well as new townhouse developments. Asking price is $19,900. I'm waiting to get an estimate on what the repairs/rehab costs would be, but based on the numbers I've run so far, unless there's something really wrong with it, it should cash flow easily.

Now for my main questions. I'm doing this deal as an equity partnership with someone who lives in Pittsburgh who I haven't done business with before. I'd be putting up the money and/or using my credit to secure financing, and he would landlord and handle maintenance, as well as live in one of the units rent free. Given this situation, I assume that the best way to set this up would be to create an LLC with both of us as equal partners/shareholders, and have all cash flow and expenses deposited and paid out of an account opened under the LLC?

And with respect to him living in one of the units, how should the positive cash flow be divided between us, given that he would be living in one of the units rent free? And should the equity in the property be normally split 50/50 in this type of situation?

I also assume I should have an equity partnership agreement outlining who gets and is responsible for what. Is there any other particular due diligence I should do regarding my potential partner beforehand?

Thanks in advance!