How to structure a partnership on this RE deal?

Me and my friend are buying a long-term cash flow real estate.

The total for real estate and repairs would be 300.000 $. The down payment will be 120.000$ and the mortgage will be 180.000$

The person A will pay the down payment of 120.000$ and will take the mortgage of 130.000$. The person A also found the deal.

The person B will take the mortgage of 50.000$

Both will equaly manage the property.

The property should cash-flow around 10.000-15.000$ per year. 

How in your expertise would you structure such a deal? What portion should the person B get (in equity and cash flow) for taking the mortgage of 50.000$? 

Comments

  • That is tough, It is a weird structure and it also may cause problems to have both people managing equally. What if one doesn't do any work or wants out? Personally if I was person A, I would not give them any of the deal, I would pay a straight interest rate. 
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  • I agree with Mark. Not sure what Person A is getting out of the deal by involving Person B. It is tough to define what "equal" management means and how that will be determined and enforced with the two parties. Person A is taking a lot more risk and putting way more money into the deal, and they also found the deal. With equal management, I guess one option to structure the deal would just have the income each person gets be a ratio of how much each person has contributed financially. However, I think it would be fair to also provide Person A with some form of compensation for finding the deal.
  • It will also get complicated with two people holding different amounts of the mortgage if one person wants out of the deal.

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