How To Handle 1031 Contribution From Partner
Hi There,
My husband and I have a deal to buy 1.8M worth of Duplexes. We don't have the credit or the cash to buy them.
We found a couple who is getting $90K in the next month from the sale of a home. They're willing to put that money into our deal through a 1031 exchange.
We will be using someone else's 720 credit score to get the remainder of the funding and the owner is carrying back 10%.
Would appreciate any advice on how to structure this deal and compensate the "partners" in this case. The person who's credit we use and the the partners giving this money through the 1031 exchange.
For either case, can these partners receive equity only benefits? Or does cash flow need to be shared? What is common and where do I go for more advice.
Thank you in advance for your help.
:-D
This is way too big a deal with trying to wing it by yourself...have a good RE lawyer do the agreement for you both, setting out who gets what benefits, etc.
I agree with John. On a transaction of this size no-one is going to care much what the credit score of the borrower is. But attempting to do a $1.8 M with 5% down and no reserves is a formula for disaster.