{"id":441,"date":"2007-04-04T09:02:36","date_gmt":"2007-04-04T17:02:36","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/2007\/04\/04\/establishing-a-partnership-for-a-real-estate-deal\/"},"modified":"2021-03-16T09:34:54","modified_gmt":"2021-03-16T15:34:54","slug":"2007-04-04-establishing-a-partnership-for-a-real-estate-deal","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/2007-04-04-establishing-a-partnership-for-a-real-estate-deal","title":{"rendered":"Establishing a Partnership for a Real Estate Deal"},"content":{"rendered":"<p><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2007\/04\/shaking_hands.jpg\" alt=\"Title: Shaking hands by: acerin\" align=\"right\" hspace=\"7\" title=\"\">Earlier today I received an email from someone asking for help.  She had found a property and a <a href=\"https:\/\/www.biggerpockets.com\/blog\/2006\/11\/16\/real-estate-partnership-questions\/\" target=\"_blank\">partner<\/a> to purchase the property with, yet hadn&#8217;t figured out how to split the proceeds \/ profits \/ etc.  The question is a good one, but I hope she was not asking it after the fact.  <\/p>\n<p><b>NEVER GET INTO A DEAL WITH PARTNERS WITHOUT HAVING A FORMALIZED REAL ESTATE PARTNERSHIP AGREEMENT<\/b><\/p>\n<p>If you don&#8217;t take the time to work up a formalized agreement and purchase a property with partners, you can get yourself into some real trouble.  <\/p>\n<p>Make sure you consider the following things in putting this real estate partnership document together:<\/p>\n<ul>\n<li>Who is putting up funds and how much are they giving?\n<\/li>\n<li>What is the percentage split of funds?\n<\/li>\n<li>Who will be actively managing the property?\n<\/li>\n<li>What will each partner&#8217;s role be in the day to day care of the property? (consider little things like who wants to be woken up at 3 AM if the is a problem with the property)\n<\/li>\n<li>Who will be on title?\n<\/li>\n<li>Who will apply for the loan?<\/li>\n<li>How will expenses be covered?\n<\/li>\n<li>How will any monthly profits be split?\n<\/li>\n<li>If sold, how will the proceeds be split?\n<\/li>\n<\/ul>\n<p>Break things down even further and have a clear understanding of all roles of all parties.  When you have figured out the roles and amounts of money that are put up for the deal, negotiate a fair balance between these to come up with percentage splits in profits, proceeds, ownership, etc.  Write these down in the partnership agreement.  Once you&#8217;ve completed the document, pay the extra money and have an attorney review it to be sure both parties are protected.  Then, and only then, should you move forward with a deal with partners.<\/p>\n<p>Are there any other points that I&#8217;m missing . . . ?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Earlier today I received an email from someone asking for help. She had found a property and a partner to purchase the property with, yet hadn&#8217;t figured out how to [&hellip;]<\/p>\n","protected":false},"author":827,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-441","post","type-post","status-publish","format-standard","hentry","category-real-estate-investing-for-beginners"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/827"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=441"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/441\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}