All Forum Posts by: Tim Slatt

One of my good friends has been hearing me talk about rental properties in my area of interest (Fall River, MA 02723).  He just brought me into his office (we work together) and told me he's about to come into some money and would be interested in setting up a real estate partnership, but the terms sounded a bit unusual.  I can't tell if I'm on the good or the bad side of it.  Here it is in a nutshell:

• He puts up all the money to buy the property in cash and fund any repairs (in this example we'll use $50,000)
• His wife (a real estate agent) helps find the deal and does the bookkeeping
• We split any renovation work not done by a contractor 50/50
• I am responsible for paying him back $25k, which would come from my half of any cash flow.  My equity stake in the property would be increased by a small percentage with each dollar I buy in.
• He reserves the right to sell the property, at which point any of his remaining funds owed by me comes out of our profit and we split the remainder.

Obviously it's not a loan, and it's not a typical 50/50 partnership, it seems to be something in between.  From what I can tell the "interest"in the property comes in the form of my lack of initial equity.  

Any thoughts on the matter?  Anything that's staring me in the face that I'm missing?  I'm sure there is.

My story is probably pretty common...bought my Fall River, MA condo in 2007 (when I thought we had hit the "bottom" of the market...ya), lived in it for 5 years.In 2012, my wife and I wanted to buy a house, and selling the condo was out of the question since I could only get about half what I owed.So, we became landlords.And a funny thing happened…I enjoyed the process and a lot of things about it.I’ve found two great tenants who are low maintenance and pay on time.So here I am, looking for more property.I think I know what I’m looking for as far as a good deal, but I worry I’m not going to be able to finance the deal when I find it due to lack of funds.Hopefully between this forum, the podcast, and the half dozen books I’ve bought, the answers will come.We’ll see what happens!