I would like to invest my parent’s money in a downpayment for an investment property. I would be getting the mortgage and making the payments myself. The rent would be covering mortgage payments and other expenses, yielding about $150/month positive cashflow.
I am not sure about how to split equity and cashflow. Could anyone tell me if there’s a standard formula to determine the split?
In summary: my parents provide the down payment, I provide the loan, the house and mortgage will be on my name. I’d like to split cashflow w/parents each month, and give them part of the equity when we sell the house. The question is: what is a fair split of cashflow and equity?
Thanks for any help!
PS: since it’s my parents I won’t worry about setting up a legal partnership, unless there’s a good reason to do so.