How to partner with another company on a real estate deal?

3 Replies

My company and a another company, (both extremely small businesses), would like to partner up to purchase & manage a multi-family House. How should we handle the partnership terms? 

Thank you.

Dana

Dana N.

    1)if you both have your entities under an LLC then those entities are/will be buying the properties . If both are 50/50 or what ever you decide. 2)Now if you merge from now on for all your dealings just create another entity from scratch and go forward. 3) if you merge equity's so you need to figure out each company's worth equity you will need business apraiser Which is an expensive and I don't know if its worth it since you are saying both are small business.

    Hi John Z,

    Thank you for commenting. I think doing it as you said as forming another LLC and doing deals that way we can implement an partner/operating agreement to establish each company's role. We will need to figure how to split expenses/profits. We were looking at a Muliti-Family (3-units) to partner-up to purchase as a buy and hold for rental property.

    Thanks again.

    Dana

    NicholandSons RE, LLC

    Dana N.

      I would definitely suggest an operating agreement even if you create another LLC. You need to have scenarios outlined in writing so everything goes smoothly.

      Ryan Dossey, Real Estate Agent in IN (#RB15001099)

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