I’ve owned my home in NV for 2 yrs, and recently rented it out after living there. I’ve asked my brother to join me on the investment for a variety of reasons. The loan is in my name, and I have over $100,000 equity in the property already. Does anyone have suggestions or experience about this kind of partner investing when all liabilities are already in one name. We don’t think we can find as good an interest rate as what I obtained last year, so we plan to keep the loan. I want to protect my interest, but make it a fair investment for my brother from the point that he steps on as my partner as well.
Thanks for any helpful advice that anyone may have.
jcd
form an LLC with brother. sell/refi the property to the LLC, so that he’s in for half (or whatever his share is) of the debt. With that much equity you should have no problem finding a lender willing to loan to the LLC for the balance on the mortgage, and you take a 2nd for the remaining equity. That way you’re not “giving” him $50,000 of equity (since he would own half the company, he would own half the assets of the company) do NOT put the house in as an equity contribution. take debt that can be repaid to you in the event something crashes.
generally friends and family do not make good business partners.
What does your brother bring to the partnership?
Right now it’s a rental (main house and back dwelling.) We have to evict the tenant in the back & review lease with main house tenant. My brother will help me to cover the house pymt, plus be a stronger business force with the remaining tenant. He has several rentals of his own. He’ll pay the transfer tax, and do the property mgmt for me, as this is my only asset for my kids.
We will have a Broker’s Property Opinion (market evaluation) and establish the current amount of actual equity, we will both be responsible to cover the amount we will be short on the mortgage pymt once we lose that income from small house tenant, and he will handle the property mgmt for me. He will earn 50% equity from this point on only; previous equity will remain mine.