Are the #s good & Partner ??s

[Evan Haslund]

Sorry if the title is confusing, but I have quite a few questions regarding a potential rental property and about getting a partner.

Let me give a little background...I am self employed and my wife works very part time. We just closed on a condo to live in about two weeks ago. Since we have been in the process of buying this house, I have been doing my research about getting into rental properties. We don't make enough to take on a second mortgage, so I would want to bring in a partner because as I've heard multiple times...50% of something is better than 100% of nothing...

First, how do terms normally work when partnering up. I would do all the work, and could even do a portion of the financing. All I want is for someone to take on the mortgage with me and that is it. All I'm asking is for the partner to take on some of the risk. So my main question is; What kind of financial split is normal? Do we do 50/50, or since I am doing all of the work, do I get a bigger cut. I'm not trying to sound money hungry, I just want to know what is normal and fair.

Second question/topic is whether these numbers work or not. I spoke to the owner of the house, their situation is the owner was a 90ish year old lady who passed away early this year. Her son and daughter in law are getting it cleaned up to sell it. I am the one who went in to clean it because she got someones number, and they gave her my number, so I went in to clean and asked her a few questions about her selling it. She is not interested in seller financing, they just want to sell it and cut ties. Her mother in law is the only one who has lived in it I'm pretty sure, and its from the 1950s. It is deceptively larger on the inside. It's a 3 bedroom, 2 bath. It's a little over 1,500 sq ft and she said she was getting it appraised and she would call me before she did anything else. She originally said they were looking to get around 50-55k. Before I arrived, she was talking to a realtor and he told her they could probably rent it out for about $750 a month. The mortgage should be around 280/mo for a 30 year loan, and taxes + insurance should be around 120. I bought my house for about the same price, so the numbers should be pretty similar. The neighborhood looks like a mix of C and B. It's not in the ghetto by any means, but it's not the nicest part of town either. It is maybe 1/8 of a mile from the main road in town. I don't think it would need much work, the place is a bit aged, but it looks very well taken care of. I would just need to get the wallpaper off the walls, paint, and I didn't notice anything that looked damaged. It looks like all appliances including washer and dryer would be included.

With that said, I know this is a very lengthy post, but any advice would be super helpful. Thanks for reading guys!

PS. Here are the numbers that I've run, could anyone tell me if I'm missing anything or if I should fluctuate anything?

Mortgage $55,000

EXPENSES

Monthly Payment-$280 ($3360/yr)

Taxes-$60 ($720/yr)

Insurance-$60 ($720/yr)

INCOME+750/mo ($9000/yr)

Monthly Profit=$4200

Taking in account potential damages, I wouldn't want to touch any of that for at least two years. After two years, I don't mind accepting the rest as income. I'm guessing that profit would be taxed at 15%, which brings it down to $3,570. If that were split two ways, that would come out to $1,785 per person. So would that be worth it?