Sole Proprietor vs. Partnership
So here I am, age 25, new family ... starting to plan for and look into buying my first live-in, multi-family, rental property.
Part of my learning process leads me to talk with some very close friends (three of them, to be exact) about my ideas. And surprise, surprise each of them is also interesting in the realm of real estate investing!
So here's my QUESTION: What are the pro's and con's of partnering with other investors versus going it solo?
Here are my basis points currently:
1) I really trust these guys, and they all have pertinent experience with construction, remodeling and HVAC.
2) We are all in the same stage of life... mid 20's, currently renting, new family's, and most importantly low personal capitol.
Here is what I'm weighing:
1) Is it more helpful or more harmful to have cost/profit sharing? (an insurance of sorts)
2) If we were to partner together... is it better to start together? ...or start separately and bring our initial investments to the table later?
3) If we did partner, at whatever stage that is... what business model is best for property investing and management as a partnership? (i.e. general partnership, LLP, LLC, or an incorporation)
Some things I'm looking for:
1) What are the financing options for an individual with low initial capitol? And what are the options for a partnership with low initial capitol?
2) Are there other smart ways for us to partner that would't require a legal entity to be formed?
I know this is a broad and complicated discussion. And I may not even have all the right questions. But don't feel like you have to tackle every point. I'll appreciate input on any of these areas from those of you with practical experience. Thanks for your time!