I'd get your roles, plans, expectations, capital and non-capital contributions, future profit distributions , etc. in writing before working together... be it a formal company (highly suggested) or a defacto partnership.

These loans will probably have shorter terms, 15, maybe 20 years.I'm guessing your parents are willing to give you some credit for the work you contribute.

At 142, I'm coming up with about a 7% return, which I don't think is enough:Purchase Price: 142,000Down (25%): 35,500Closing: 3,000Misc: 1,000Seller contribution to closing (2%): -2840Total cash invested: 36660Gross income: 18000Expenses@50%: 9000NOI: 9000Debt service (4.5% for 30 yrs): 6475 (540/month)Cash flow: 2524 (210/month), or about 6.9% COC.At 130K, the return goes up to about 9.1%, which I'd consider to be just barely in the ballpark.I know what you mean about the Dallas market.

Your contribution is your scouting talent, execution of the deal (selecting attorney, contractor, etc.), management of the rehab, etc., with your partner's contribution of capital and management.

I believe you can each contribute $3,250 a year, but that's off the top of my head.

Also be SURE to have a well defined written agreement (Operating Agreement) with your partner about who is responsible for doing what and how money will be contributed and extracted and an exit strategy and an alternative exit strategy etc.

That would be a contribution.

I want to thank everyone who has contributed to that!

Some 1st mtg's (Fannie, Freddie, HAFA) do not allow anyone to contribute additional money to a junior lien, above and beyond what they offer, and the junior lien must waive the deficiency.

Anyway, just wanted to introduce myself, and I hope I can be a contribution to this site.