Would you buy 10% of a rental property as an investment?

[FreelanceToFreedom]

Update: I've decided against this. Thanks everyone for the advice!

[waltworks]

It's a pretty terrible investment and involves family and money. Good lord, no.

-W

[Dicey]

Hell, no!

[Paper Chaser]

If the ultimate goal is to own this property or something similar in 5 years, then you'll need more money. Parking your $40k downpayment in an investment that returns 4% for the next 5 years, isn't going to grow the funds fast enough to buy the property by the time your dad wants to sell. Your $40k would grow to $48k, which isn't close to enough to buy a $680k property, and even worse if the place appreciates. Indexing the $40k is likely to result in better growth and more money available for a downpayment in 5 years, but even then it may not be enough.

[Sibley]

Nope.

If your dad needs help managing, then he should hire a management company. Or just sell the place. All this complication is just that - complication, and it's going to bite you.

On the other hand, if your dad is trying to control you, this is a pretty effective way to do so. Tie down a good chunk of your available capital, saddle you with tax debt whenever he chooses, not to mention the potential emotional strings he would be able to pull.

If your dad isn't abusive, great. That doesn't make this any better of an idea.

[goodmoneygoodlife]

I'd say no to this. Sounds like a bad idea because you have no control.

And if you have no control / no decision making, then you're not really learning anything in real estate (you're just exposing your $ to real estate -- and you can do that with REITs which you already have).

But I'm not sure what kind of deal this is, if I hear you correctly:
1. You own 10% of the deal.
2. You can't make final decisions and have no control.
3. Your returns are solely based on your dad's position.

So you risk your money but don't have any rights?

How is this any better than investing in a syndication where you've got teams of professionals that manage these projects country-wide and have established systems? At least in a syndication you can interview sponsors and grill them on their numbers and learn how to underwrite a deal professionally.

TBH this sounds like a terrible deal for you (risk $, no control, and doesn't seem like a lot of learning opportunities) and it doesn't make any sense why you'd do this.

Forget your dad being your dad. Would you do this with someone that isn't your dad but with your dad's real estate portfolio / returns?