House hacking with an investor

[David Zimmer]

Curious how the financial arrangement is made if someone, for example, buys a duplex with investor #2 but only investor #1 lives in one of the units. Assuming both investors fronted equal amounts for down payment, closing costs, etc. Perhaps investor #2 is guaranteed 50% of the profit that would be made if both units are rented? I imagine this could be handled on monthly, quarterly or even yearly basis but sounds a little tricky to negotiate or present to a potential investor.

[Conner Olsen]

Quote from @David Zimmer:

Curious how the financial arrangement is made if someone, for example, buys a duplex with investor #2 but only investor #1 lives in one of the units. Assuming both investors fronted equal amounts for down payment, closing costs, etc. Perhaps investor #2 is guaranteed 50% of the profit that would be made if both units are rented? I imagine this could be handled on monthly, quarterly or even yearly basis but sounds a little tricky to negotiate or present to a potential investor.

I think the biggest potential problem with this will come with lending. I'd talk to a house hacking friendly lender and ask if they've done it in the past. Also you couldn't do an LLC so it creates more risk than some investors want to deal with. I've heard of people trying to do this but never getting it to work. Would love to hear someone that has accomplished this and any roadblocks they encountered.