Partnership with family

3 Replies

Hi guys.  A family member and I have decided to invest in a property together.  We have agreed on a 50/50 split, in which they will fund majority of down payment, and I will manage the property.  We will split rental income profits, and will split profits if we sell the property in the future.

Would you recommend us BOTH being on the title, or would it make more sense for us to sign a partnership agreement stating scope of agreement, in which only one of us (me) is on the title?  

Hello Ryan! I would do both. Partnerships, especially with family, can get shaky in a hurry. I would have you both on the title so that nobody can sell the sell the house without the other. I would also have a partnership agreement detailing the profit split, expense split, and your roles. This is very important IMO. I am in multiple partnership and I highly recommend it. 

@Jon Schoeller Thank you, Jon! It's the first deal for both of us. Would you recommend we close as individuals (both on title), and then transfer in to a joint LLC? We want to ensure we are covering our assets adequately. New to all of this.

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Unless the LLC is already formed. Then yes, just close it as yourselves and then quitclaim it back to the LLC once its formed.