I am planning to purchase my first multi-family property. I have a background in accounting and my strengths are more on the business/ organization side of investing. I do not have experience with maintenance or DIY projects. There is someone I know who is older, has a lot of experience with maintenance and has owned multifamily properties in the past.
I would want his help with my first property, but I am considering how to approach this. My two options I thought of was to ask him to handle the maintenance of the property and I could pay him like a property manager, or ask him to partner with me. I feel paying him like a property manager would not be worth it to him, especially since all I would need him to do is maintenance and do some updating.
If I ask him to partner he would handle the maintenance and renovation, but I would want to control the everything else. Has anyone partnered with anybody like this? Do you do joint tenancy? Would you split the ownership 50/50? How would you determine the earnings split?
Any insight is appreciated. I know I asked a lot here.
@Devon Moore are you saying you're going to split everything 50/50? the down payment, the cash-flow, the expenses, and the equity on sale/refi? -- Might not be a bad idea, you do get strength with a partner but, then again you do have to split profits. Is maintenance your only issue? -- My thought is, that if you issue is not with acquiring the property and not with the down-payment and not with managing, then I personally would not partner only because of maintenance. - I would however, figure out what the property management rate is and then pay a maintenance person on retainer monthly slightly less then that. For example... if PM cost 10% or about $200/mo. --- I would perhaps pay a maintenance man/trusted contractor say $50-100/mo. and in return ask him or her to put me at the top of list as priority whenever an issue arose and then just let me know what materials if any are needed and bill me for the parts in addition to any hours that exceed what he/she has already been paid.
@Devon Moore Just hire a property manager, they’ll cost you somewhere around 10% of gross rents. Many sizable (and they don’t have the be huge) operations have a full-time handyman they send around for maintenance. It sounds like that gets you 80% of the way there. With that off your plate you can focus your time on managing renovations (assuming you want to learn it and don’t want your PM to do).
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