My friend and I partnered on a complete rehab on a triplex. The plan was that we were going to go 50/50 on hustle and money (I have the knowledge). This is a fix and hold property. At the end of the day I financed about 95% of the project ( this includes 35k in personal credit card debt). Unfortunately his contribution was not what I expected, including the hustle.
The original plan was and still is to refinance or do a HELOC to his name to buy other properties, as he is the one with a W-2. The BRRRR strategy is the goal.
I had a very uncomfortable conversation with him were I stated my point and basically ask if he would be okey with me keeping 100% of the deal. Going forward once we refinance or do the HELOC we would then go 50/50 on all the deals as we had planned from the beginning.
Is this right or wrong on my part?
In advance, thank you for the feedback.
I guess you didn't read my posts (or the posts of other savvy investors) about not going into business with friends or family. Here are 15 reasons you should not start a business with friends or family. You should also read this article in Entrepreneur magazine, written by an attorney (hint: free legal advice), explaining why what you did was a bad move.
This was an inexpensive life lesson for you. Get out of the deal with him and don't do ANY more deals with him or other friends.
It's good that you had the conversation. Sounds to me like you two needed to have a open conversation about the "sads" and "glads" of how the venture has gone so far.
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