All Forum Posts by: CT Nguyen

I'm currently on the market looking to purchase the first MF investment property with a friend of mine. Below is what I'm thinking on how to go through this deal and was hoping if anyone can provide feedback. I am a RE agent in MA and own 2 other investment properties. This will be his first, and my first time purchasing an investment property with a partner, reason being we want to bring our funds together and do 25% down.

1. Both of us get pre-approved and have our names on the same mortgage

2. Go through the usual process - offer, inspection, appraisal, etc...

3. Put both of our names of the deed.

At the same, create a LLC with both of us as co-owners. We won't be able to qualified for a (commercial) loan with our LLC since it's so new.

4. Once closed, transfer the deed to the newly created LLC

I already have a LLC with only me as the owner for the other 2 properties that I own, so this will be an additional LLC to keep things separate from my partner.

Anything that you would do differently? Any feedback would be very much appreciated!

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Ian, I'm looking SF in Maine, NH, and VT. Are your lender connections licensed in these states?

Originally posted by @Ian Plocky:

@CT Nguyen, what kinds of properties are you looking at? If you are looking at SFR's, I have a few lenders that will lend you 15%. If small multifamily, than 20-25% is more industry standard.

What markets are you looking in?

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Hello,

I understand most lenders require 20-25% down for investment properties. I spoke to someone and he mentioned that he was able to secure a loan for one of his AirBnb properties with only 5% down, however, this lender is not licensed in the states that I want to invest in so I can't use them. I am wondering if anyone here has any experience with investment loans that allow borrowers to put down less than the typical 20-25%?

Thanks,

2 Votes

@Will Frase, thanks WIll. A follow-up question on this: If my partner will fund the down payment 100%, and I bring the deal as well will take care of the property management, what I can do to justify the 50/50 on the cashflow and equity split since I won't be able to contribute to the down payment?

Originally posted by @Will Fraser:

HI @CT Nguyen, I think you're spot on with the idea of splitting the cashflow 50/50, and here's how I would specifically define that for the sake of your partnership (and what I follow with mine)

Cashflow = Gross Rents Received - tax proration - insurance - P&I payments - Repairs budget - CapEx budget (if separate).

The resulting cashflow is split evenly among the partners, as is the equity from the sale (when it eventually sells).

One key thing for all partners to understand is that cashflow is only one lever you can pull in real estate investing and, depending on how your partnership is structured, you may also be equally sharing the tax benefits, appreciation, and additional principal created through debt paydown. Remember these levers and celebrate the fact that both partners can participate in them, though separately you might have both had 0% of these benefits.

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@Will Fraser, thank you for such an insightful advice!

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Hi everyone, I'm considering purchasing an investment property with a partner, who I used to work with at one of my previous jobs but we keep in touch over the years. I have 2 other investment properties that I bought myself so this would be my first time trying to buy with somebody else. Reason being I don't have enough money for the down payment (25%). So I would bring him the deal, perhaps offer to manage the property as well since I live closer to it, and he would bring the money. I would appreciate some advice on how to split the monthly rental income? Shall we split 50/50 even if I can't contribute anything for the down payment? And if we sell it, assuming we should split 50/50 as well on the profit if that was the original agreement?

Any advice would be very much appreciated!

1 Vote

All Forum Posts by: CT Nguyen

CT Nguyen has started 3 posts and replied 6 times.

Post: How should I structure a partnership if purchasing w/ a friend?

Post: Investment Loans that require less than 20% down?

Post: Investment Loans that require less than 20% down?

Post: Buying an investment with a partner

Post: Buying an investment with a partner

Post: Buying an investment with a partner