Owner-Occupied 3-Partner Investment Scenario - Any Thoughts?

[Nina Grayson]

I have two investor partners  who want to do a deal that includes one partner owner-occupying a unit.  Do you think this structure is a good deal?

Location:  Los Angeles County

Partner 1 (P1)

- P1 wants to owner-occupy with family of four (spouse and two children)

- Prequaled self (not including spouse) for $435k.  Lender ran numbers assuming a duplex, with 2nd unit as income.   

- Down $80k

- $435k would only get P1 properties in South LA, which does not meet P1 standard of living, so P1 decided to get one or two more partners to increase buying power for a better location.  

Partner 2 (P2)

- P2 is an Agent and will use commission as carry 

- Maximum purchase price $1.2 mil.

- Comm. is approx. $20k. 

Partner 3 (P3)

- P3 will take out up to $200k from equity in SFR for down

Partners will form an LLC for the purchase

-6 plex, Two 2Br, Four 1Br

- Total Down = $300k (25%)

- Loan Amt. = $900k

-Terms = 30 year, 4.5%

- Monthly payment = $5600

- Monthly Expenses = $1000

- Rents = $9600