New Investor Partnership in Atlanta market

5 Replies

Hi Everyone!

I'm looking for some advice.  I am considering starting a real estate partnership business in the Atlanta area (hold or flip) but would like if someone could outline at a high-level the preliminary steps involved starting with task #1 and moving forward kind of like a roadmap.  I would like to understand which partnership structure to choose and why,  who to contact to start a partnership (real estate lawyer etc...), and if finding financing options must come after the partnership is established. Again just looking for someone to help outline the starting points.....many thanks in advance.

Hey @Ryan Duquette ! What contributions would the various partners bring to the collective? Not to discourage you, but rarely are partnerships the ideal structure for beginning real estate investors, in my experience.

For example, often one partner wants to do all the work and the other has the money. In such a case, letting that first party create their own entity and then securing the second party's investment separately is generally cleaner, simpler, and far less expensive to set up and manage.

Originally posted by @Ryan Duquette :

Hi Everyone!

I'm looking for some advice.  I am considering starting a real estate partnership business in the Atlanta area (hold or flip) but would like if someone could outline at a high-level the preliminary steps involved starting with task #1 and moving forward kind of like a roadmap.  I would like to understand which partnership structure to choose and why,  who to contact to start a partnership (real estate lawyer etc...), and if finding financing options must come after the partnership is established. Again just looking for someone to help outline the starting points.....many thanks in advance.

Loaded question and it does depend on how each partner is involved. There is no silver bullet when creating partnerships. Task #1: start talking to your center of influence about your REI goals. Even if they are interested in getting involved, ask them who else you should be talking to. Task #1: Build Relationships.

Thank you Jay. I agree networking is the key to success. My real estate partner and I share the same goals and drive however just a little unsure if creating an LLC is the first thing to consider before seeking out financing options and finding deals. Good information on your wbsite by the way.

@Ryan Duquette The structure of the business is definitely an important decision. Taxes are handled differently for "flip" properties held less than one year so I would advise seeking a competent tax consultant that understands real estate taxes to give you good understanding on what would best benefit you and your partner. 

@Ryan Duquette

1) You should reach out to an attorney to draft up an operating agreement/partnership agreement. The agreement will mention how income/losses will be allocated among the partners, responsibility of each partner, actions that will cause a dissolution etc.
2) reach out to a commercial/portfolio/hard money lender. A partnership is not eligible for conventional loans. Each lender will have different terms and rates so its best to call as many as possible to find the one with terms that you like.
3) There may be some benefits with creating an S-corp or an LLC taxed as an S-corp for a fix and flip business.
4) reach out to an CPA to prepare the partnership return. The partnership return will distribute a K-1 to each investor based on the partnership's activity. The K-1 then gets reported on the individual taxpayer's return.

Basit Siddiqi, CPA
917-280-8544

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