Partnership idea - looking for feedback!

[Craig Garrow]

Hey everyone! I’ve been talking to a good client of mine, and we are thinking of forming a partnership to acquire a couple of small local self storage facilities. We’re hashing out some details, and this is sort of what we’re coming up with: He will pay cash for the properties, and in exchange for my management of the deals, and a very small fee (about 5% of the purchase prices) I’ll get an option to purchase the properties in 5 years for today’s price. We have determined what he wants for a return annually, and we’re going to split everything above that 50/50. He’s 65, and I’m 32, so he’s looking to just get some stable cash flow for a few years, while my payoff would be mainly in the form of sweat equity, with some small cash dividends every month. Just looking to see if anyone has done a deal similar to this, or if anyone has any suggestions or feedback. Could be a home run for me, especially if we’re able to get the NOI up on these!