Anyone started a partnership to accomplish their goals? Or close on a multifamily deal? What was your experience like? Did you both raise capital?
Hi Justin. I have two LLC's with partners. My first property I bought was with a money partner. I had the knowledge, did the research, found the property, and manage it. He funded the first property and now we are up to 4 (including a 6 unit). My other partner and I bought a duplex in cash and didn't refinance. We split the cost of the property and the llc pays us each principal and interest each month. I wouldn't have been able to afford it on my own unless I financed it. This partner does maintenance and I do leasing and management. These are two people I trust and we have management agreements in place. My deals were very small less and not huge complexes but it has given me some experience with working with a partner. I would recommend it to get farther ahead.
@Justin G. I'm partnering with someone informally to reach common goals. We invested together in a couple of deals and found that we work well together and have complimentary skill sets. We did not form a legal entity for the day to day collaboration, instead we leave the entity and business structure to be defined by each opportunity - typically an LLC.
It is to say that I have not taking on any partnerships in years. I partnered with the wrong people that did not bring any value to the real estate investing I was doing in 1995. Sad to say things went wrong and the partnership broke up our friendship of 20 plus years. I would say to any one who what
to do a partnership make sure they can add value to your goals. You must have I believe the same kind mindset. This business can be hard and stressfull and make a person want to quit.
My partner and I have 2 separate LLC's that we are each active in.
Just keep in mind tax and legal ramifications for each entity you create. Its always advisable to consult with a tax pro and an attorney prior to forming the entity. And you'll probably want to create an operating agreement.
Absolutely. I partner with operators on passive deals (private loans & syndications).
For properties that I have acquired on my own. I have partnered with friends and family to inject more capital into the deal. These are typically smaller, residential projects. They are a great way for anyone I know to get their feet wet and get comfortable with the idea.