My next BIG STEP, Partnership and Investments

1 Reply

Hello,

Here is my Introduction: 

I started browsing  the forums in January and closed on my first property in April of 2015 in Las Vegas. 

PITI is $548 a month

Rented for $950 a month. 

Its been rented within the first week of closing.

I put in about $3000 in it for repairs ( blinds, closet doors, etc) and  25% down.  

CF & ROI (Doing My Own PM)
Annual Cash Flow $2,645
Cash ROI 7.46%
Total ROI 11.63%

I believe this is pretty close to my #'s obviously thats just forecasting because I haven't had it for long term.

TO GET TO MY ACTUAL POST:

My client wants to partner with me on a property. He said and I quote.

" We have 2 mil in a land trust outside of the lab. I think 250-300k as a down would be manageable. I have a good relationship with Chase, but only if there is a great deal of certainty on the return"

He is looking to take the HEADACHE Factor out on his Investment, and prefers me to FIND the Property and Manage it.. While he collects checks. 

We both have 1+ units in Las Vegas ( I think he has 2-3 Units in Vegas, they sit unrented, mine is rented).

We are looking at getting into a bigger multiplex property ( maybe 8 units+++ commercial Apartments); obviously depending where is the factor on size/price.

Areas we are looking for are Palm Springs, Wildomar, Murrieta, and even continuing to invest in Las Vegas. 

Las Vegas has higher Cashflow/ROI but further and with bigger properties it becomes more managing people vs the actual unit themselves.

Buying in Wildomar, Palm Springs Etc.. Closer but not a good return maybe a 3-4% Cap? 

Both areas seem to be growing. 

Now for the Actual Partnership..

If he is supplying the Capital, and I will be managing the properties, do you feel 50/50 Split is fair? I own my own fitness company so It will be more of a mid-day job, weekend job. 

My fiancee ( soon to be wife, 8 months from this post) actually works in property management and over sees 350+ units for a major developer in California so I also have that on the offering table. 

How would Maintenance work?

Pre Move In Repairs?

( I am not a handyman at all, nor do I have the time to) 

Anyone have a Sample Partnership. Capital VS Management. 

What type of Partnership LLC? LLP? Joint Venture? Etc.

I think the best bet would be JV, and scaling from there..

Some Posts I have been reading about this :

http://www.biggerpockets.com/forums/109/topics/154527-joint-real-estate-partnership-with-best-friend--need-help-with-legal-advice-deal-contingenies-etc  ( this has been the most help)

http://www.biggerpockets.com/forums/50/topics/1683...

http://www.biggerpockets.com/forums/432/topics/209...

http://www.biggerpockets.com/forums/521/topics/116...

Also I found out you need to be licensed to manage properties.. What is defined as managing? 

If I own 100 single family homes do I still need to be licensed to manage all my own properties?

If I am in a joint venture of an apartment  and own say 50/50 do I need to be licensed?

40/60

10/90?

Or only need to be licensed if I am mansgeubg properties I don't have any ownership? 

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