Looking For Credit Partner For Next House Hack

[Will Walker]

I'm self employed with over $200,000 equity across three rental properties, two of which were previous house-hacks. I quit my job to start flipping couches while my wife and I travel in search of our next house-hack. In the past I've used non-QM loans like bank statement loans with near 10% interest rates for example, and still found ways to cashflow using section-8 and rent-by-room strategy. I am selling two properties to free up ~$100,000 to put down on a house-hack in the Denver area. After speaking with many lenders it looks like I should be looking for either seller financing utilizing 40-50-10 lending, an owner occupied DSCR loan(which I thought didn't exist until speaking with a lender who has done them), or bringing in a co-signer. I could see offering a percentage of the profits(cashflow/equity) to a partner willing to help me qualify for a conventional loan ($400k-$600k purchase price) while I take most of the risk bringing my own down payment.

Has anyone else done this? 

How would I go about finding a credit partner? 

How can I best offer downside protection for my credit partner?

Example deal (based off of an actual house currently on the market)

Property: 5bd 3ba, 2300sq' (with additional convertible square footage)

Purchase Price: $480,000

Funding: 5% down plus 5% closing costs ($47,000) conventional loan, keeping 6mo of liquid reserves.

Room by room rental income per room: $800/mo or $1000/mo (section-8) = $5k-$6k/mo

Cashflow after expenses: ~$2000 conservatively

A credit partner could receive $1000/mo in passive income and/or some % of equity in the deal for a certain period of time (maybe as long as their name is on the loan) or until a certain amount of $. In the unlikely event of a default, the property would be sold and I would lose some or all of my equity and the partner would still be covered from any risk. What am I missing?

Thanks in advance!