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Updated 3 days ago on . Most recent reply

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Andrew Hejtmanek
  • Investor
  • Broken Arrow, OK
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Wisdom on Partnership Structure

Andrew Hejtmanek
  • Investor
  • Broken Arrow, OK
Posted

Good Morning BP!

I'm an investor in Oklahoma.  Over the past 7 years, a buddy and I have partnered 50/50 on a few flips and currently have 1 long-term rental.  We would have more, but I went through a divorce and that really slowed us down.  Now we are looking to ramp back up.

This time, it looks like its going to be a little different.  I have the capacity to bring cash to enable acquisition.  He has some, but its definitely a bit more limited but he is the rehab manager and he is excellent at managing the day-to-day.  

We were contemplating setting up a new LLC with different ownership %'s where he would see cash flow as he operates the properties (similar to a property management firm), but might only own 10% (or something similar). He would benefit from monthly cash flow whereas I'm more interested in the long-term benefits (appreciation, debt paydown and yes, cash flow).

Does anyone have any suggestions on structure/terms that you may have seen in the past that would be beneficial to us both?

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Drew Sygit
#1 Real Estate Horror Stories Contributor
  • Property Manager
  • Royal Oak, MI
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Drew Sygit
#1 Real Estate Horror Stories Contributor
  • Property Manager
  • Royal Oak, MI
Replied

Get an attorney to draw this up!

Think of every possible outcome and have it covered, including death or incapacitation of one of you.

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