An acquaintance and I have been in discussion for awhile now about partnering on some future buy & hold deals. I know there is a lot that goes into partnering with some one but my question is how people recommend we structure it. My contributions would are: I have my real estate license, I live in the area we would like to invest in so I would be managing the renovation, tenant placement, and property management. His contribution would almost purely be monetary but we both agree that I should have some of my own money invested as well. One idea would be for me to contribute 20% of the funds plus everything mentioned prior while he provides 80% but we split the profits 50/50 what are your thoughts and/or experiences? Thanks!
Do not underestimate the amount of work you'll be putting into this project. Also, each joint venture will be different. Partnership agreements carry significant weight unless they violate some sort of public policy or seek to waive a duty case law demands is non waivable. So, feel free to write a partial agreement that best suits your interests. Keep in mind that the more invested you are in this project mentally, the more energy there will be put into the renovations the tenant placement in the management. I'm sure your partner wants you as motivated as possible. If the initial funds are real concern, it might be worth considering structuring the distributions in such a way that he or she recuperates the initial investment first.
I posted my last post by accident. The ending should read ****THIS is not legal of advice. please consult an attorney. Whether a partnership agreement carries significant weight or not may be different in your jurisdiction.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you