Last year I purchased 2 properties with my first JV partner. He uses his personal line of credit to finance the downpayment and closing costs.
The first one is a single-family home with littel cash flow. Hence, we agreed to leave all cash flow in the account for 12 months, and that he will be reimbursed his interest costs at the end of Year 1 from the money we saved over these 12 months in that account.
Recently we purchased a 4-plex and the cashflow actually is sufficient to pay him his interest costs monthly. What is a common practice? Should I pay him monthly, or arrange a similar structure in which he will be refunded his interest costs in 12 months ?
I appreciate any suggestions.
Oleg
The first one is a single-family home with littel cash flow. Hence, we agreed to leave all cash flow in the account for 12 months, and that he will be reimbursed his interest costs at the end of Year 1 from the money we saved over these 12 months in that account.
Recently we purchased a 4-plex and the cashflow actually is sufficient to pay him his interest costs monthly. What is a common practice? Should I pay him monthly, or arrange a similar structure in which he will be refunded his interest costs in 12 months ?
I appreciate any suggestions.
Oleg
