Partner on a triplex

[Tony Velez]

Hi,

I put a triplex and they accepted. My mom was asking about possible partnering with me on the deal. Then she would like to get out in 5 years.  First we would both put $25k down payment each. Split the cash flow. 

After 5 years what are our options? She gets back her $25 plus.....? Not sure how to make it benefit her. 

Thanks

Tony Velez

[Michael Ferrera]

Hey Tony,

I see your question and here are some things to consider. 

1."Why" does she want to invest or put in the 25K?  This is important because then you can see how it's beneficial to both parties. Some people invest in real estate solely because I need tax benefits. Or she may invest in real estate mainly because you're her son she just wants to help you. Who knows? Ask why and then the forum on BP can probably be more helpful. 

2. If she is investing in the deal for revenue then just do the five-year term commitment. Just as you said you both put up the cash and then split the rental income for the five years. After the five years you can refinance the property and pay her the 25K she put up and 50% of the equity. You can leave your 25K put up and the equity in the home as well or take it out in cash. It might be beneficial for you to have a line credit at that 5-year time horizon which will allow you to buy other real estate projects. Also after the five years you collect 100% of the rent income since your mother is no longer in the deal. Hope that helps. If any other questions feel free to inbox me all the best.

Michael Ferrera

www.michaelferrera.me