Real Estate Deal Analysis & Advice

3 Ways to Partner With an Experienced Investor For Your First Multifamily Deal

Expertise: Business Management, Commercial Real Estate, Landlording & Rental Properties, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Personal Development, Real Estate Investing Basics
126 Articles Written

You want to get into multifamily investing and you’ve been out there looking for deals. You’re getting some traction on a couple, but you realize that your lack of track record is keeping you from getting the deals under contract. You’ve raised some money, but not nearly enough to do the deal yourself.

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What do you do?

Your mentor advises you to partner with someone more experienced who might be able to support you and possibly help you raise some or all of the money for the deal. This would, of course, give you only a slice of the pie (and not the whole thing), but you realize that it would also get you into your first deal. This would give you track record, and you’d be poised to do your next deal on your own.

This all sounds great, but how should you structure the deal with that potential partner?

Here are my thoughts based on conversations with other investors who have partnered on deals.

3 Ways to Engage With a More Experienced Partner For Your First Multifamily Deal

Scenario #1: Bird Dog the Deal

You have verbal agreement on a deal or maybe you even have a signed LOI. Your experienced partner will put the deal under contract, and he might pay you something — say, a third of the acquisition fee (which is usually 1%-3% of the purchase price) at closing. Make sure you check with your attorney to make sure you're not breaking any laws if you're doing this without a broker's license.


Scenario #2: Wholesale the Deal

If you have the deal under contract, you can “assign” the contract to your more experienced partner. Your profit is the spread between your contract price with the seller and that with your partner.

As a condition of either scenario, you could negotiate with your partner that you continue to stay involved so you can learn from the process.

Related: How to Best Structure a Partnership for Investing in Rental Properties

Scenario #3: Share the General Partnership With Your Partner

In this scenario, you and your more experienced partner become "general partners." This is appropriate if you want to do MOST or ALL of the work but perhaps need help raising money and/or want ongoing support throughout the process. There are 3 types of roles and responsibilities that will determine the equity split or "General Partner Share":

  • The “Contract Share”: 20% of the general partner share is for finding the deal and getting it under contract.
  • The “Raising Money Share”: 50% is for raising the money.
  • The “Management Share”: 30% is for being the primary person managing the property after closing.


Here is an example of how this would work in practice.

Let’s say you and your partner purchase a building for $2M and require $400,000 to close. The investors get 80% of the deal (this is the “Limited Partner Share”) and the General Partners (you and your partner) get 20% (this is the “General Partner Share”). This is how you decide to split the General Partner Share:

  • The “Contract Share”: You find the deal and your partner helps you analyze it and get it under contract. You split the Contract Share 50/50 so that each of you get 10% of the General Partner Share (for a total of 20% which makes up the “Contract Share” portion of the General Partner Share).
  • The “Raising Money Share”: You raise half the money, and your partner raises the other half. Again, you split the Raising Money Share 50/50 so that each of you get 25% of the General Partner Share.
  • The “Management Share”: You’re the primary manager but want ongoing support from your partner. You decide to split the Management Share 60/40, with 20% of the General Partner Share going to you and 10% going to your partner for his ongoing role in the deal.

Related: Thinking About Buying a Multifamily? STOP! Wait Until You Read This!

So in this example, you would get 55% of the General Partner Share, and your partner would get 45%. The terms of your arrangement would be the operating agreement.


Don’t let your lack of experience of capital stop you from pursuing your dreams of financial independence with apartment building investing. Instead, partner with a more experienced investor and get yourself into that elusive first deal. Once you do, the sky’s the limit!

What do you think? Could this work?

Leave me a comment and let me know what you think!

Michael Blank is a leading authority on apartment building investing in the United States. He’s passionate about helping others become financially free in 3-5 years by investing in apartment buildi...
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    James Gorman IV Investor from Gig Harbor, Washington
    Replied over 4 years ago
    The venture sharing percentages proposed in this post appear to be well beyond the competitive range for the services to be provided to the investor partner. However, it all is about the deal & risk assumption.
    Michael Blank Rental Property Investor from Northern Virginia, VA
    Replied over 4 years ago
    I interviewed someone yesterday for my podcast, and in his 2nd syndicated deal (much larger) he partnered with a more experienced syndicator and gave up 75% of the deal and STILL has to raise all the money. This may be an extreme example and perhaps I wouldn’t advise giving up that much, but he doesn’t see it that way. He sees that he just did a 150+ deal and is positioning himself for larger deals that he can do himself in the future. So what I proposed is just one way to do it.
    Gary O
    Replied over 4 years ago
    My only problem with this example is that I do have a project in mind. I have been thinking that my more experienced and better financially prepared partner would probably say what he would be willing to do and why. At that point I can only hope that my idea is as good as I think, but more importantly that my judgement of character is on par as well. I am a dreamer and as such it is next to impossible for me to think that an idea I think is good wont be seen that way by the really great investors. I have no wish to exit this deal with a percentage of the take, I want to negotiate for ownership on mutually beneficial terms. I don’t really like Donald Trump but he has some really good ideas at times. I wasn’t around to see Walt Disney turned down on all but the last turn, but I know that they met failure up close and personal and turned it into outrageous success. I have met a whole bunch of people who are willing to risk their money on the short term as long as the numbers work and of coarse the person proposing the venture is willing to risk their everything. I have never had the courage to ask for a partnership that I couldn’t see my end in, I say this because I don’t want to bail out of a couple of things I have in mind, I want to let the profits on the long term buy out my partner. I am one of those people who had trouble in school because I just couldn’t focus on the accepted order of things, that might explain my distorted view at this point. Regardless of all these things, I know a few people who wont get mad and will listen to me muddle my way through my proposal and be nice if they tell me no. A lot is happening and I don’t want them to miss the opportunity.
    Jeromy Williams Specialist from Redding, CA
    Replied over 4 years ago
    Great post for me! Thanks! This boosts my confidence to go after my first multifamily deal.
    Replied over 4 years ago
    Well now it’s just a matter of actually finding a more experienced investor to partner with…
    Michael Blank Rental Property Investor from Northern Virginia, VA
    Replied over 4 years ago
    Hi Stephen – I’m a potential partner. And BP is full of potential partners … Now, go find a good deal! 🙂
    Andres Blandon Investor from Lakeland, Fl
    Replied over 4 years ago
    Hey @MICHAEL BLANK, I have a good deal and i’m looking for a partner. I have a 2,300 squarefoot 5/2.5 single family home that is under contract for 148k. The appraisal came in at 194k and the ARV is well above 230k. the rehab is 23k. I can’t seem to find partners anywhere, just hard money lenders that want 30% down. I have spent a lot of time getting a system down to find good deals, but without capital these deals are just passing by. Let me know if you could help.
    Clint Bolton Real Estate Broker from Hernando, MS
    Replied about 4 years ago
    Hi @Andres Blandon, did you get this deal done? I just read this article for the first time and saw your comment. Just curious… It looked like a good deal. Send me a direct message and let me know how it went. I’d like to hear more about what you have going on!
    Angelo Russell Real Estate Agent from Brooklyn, NY
    Replied about 1 year ago
    I’m not very clear on this. If I find a great investment property and I come to an investor. I say “I found this property with ARV of 100K and I got it for $60K. It needs 10K in repairs.” Would the investor make the 30K downpayment, pay the closing costs and get the mortgage on his name? At the same time Is it normal for me to give the investor a 5% PPR and 50% share?