I own a SFH home that is about 1 mile from the core of downtown Tucson. The property I own comes with a vacant lot and I'm exploring building a duplex on it. One strategy I'm considering is to look for an investment partner to team up on the costs. Below, I'll overview a numbered list of what I'm initially thinking and please provide feedback on any of the points you think are in need of it. I'm looking to learn.
The cost of the 1200 sf duplex is $300,000. It can't be split from SFH parcel. They are part of one lot.
1. Since I've purchased the property ($300,000), I'm hoping to contribute $100,000 cash and the investor partner to contribute $200,000 cash to build the duplex. I continue to pay the old mortgage: $1500/month.
2. The investor partner and I split the rental income of the two duplex units. (Each unit to rent for $1,200 for a grand total of $2,400/month.)
3. The investor partner and I split maintenance and repairs of the duplex plus additional property taxes as a result of the duplex. We split landlord duties or hire a property manager.
4. There is an agreement about what happens if I sell the property and perhaps a way to buy the investor out. I'd be interested in opinions about what a reasonable buy out would be. (For example, $200,000 to cover investor contribution plus $X.)
There are many more details to hash out. At this point, I'm mainly interested in "back of napkin" type deal that would make this worthwhile for both sides.
I'm clearly new to this so thanks for any feedback to get me on the right track.
