Hypothetical Partnership Deal Analysis

[Christine Smith]

Hey Everyone,

I'm trying to make sure I'm not leaving anything out of a buy and hold proposal I'm going to run by a potential partner. Can you let me know what's missing, incorrect, or left out? Thanks in advance!

Goal: Use OPM to cover downpayment. Then cash out refi to refund partner's cash down.

PP: $285k on SFH

DP: $71,250 (25%) - comes from partner

Mortgage: 3.5% at 30 years

Rent: $2,100/mo

Expenses (incl. cap ex., vacancy, etc.): $1,791

CF: $308

Plan: after 6-months, to cash out refi on the property with a 5% interest rate to buy out the partner. So partner would make $3562 (5%) on their $71,250.

Cash Out ReFi: 3.5% at 30-years at 70% LTV (assuming no appraisal increase) = $199,500. (<---- this is where I get real uncertain and feel like something is off.)

Payback Partner: $74,812

Leaves me: $124k

How are the numbers?

Should we co-sign on the property at purchase for legal clarity of ownership, then how would I qualify for the balance on the refi (I'm self-employed with a lot of deductions)?

Any other thoughts, questions, ideas?

Thank you!