How should I structure my partnership with a financing partner?

7 Replies

I’m interested in hearing ways people (that have executed partnership agreements) have structured deals with partners bringing the financing to a multi-family deal.

In my case, I have investors interested in partnering with me on off-market multi-family property I find that exhibits upside in appreciating areas in my market (Columbus, Ohio).

I typically only require the financing partner to bring the funds, and I am responsible for everything in between. I find the deals, stabilize the asset by offering project management (I have a full-time contracting crew) and handle the property management/leasing.

So if you were in my position, how would you structure it? What kind of terms would be a must for you? I want to ensure that any partnership I jump into is mutually beneficial, and I certainly don’t want to give up more than I ought to.

Would love to hear thoughts from those with experience in this area!

Thanks in advance!

@Jeff Tyndall this will all depend on the investor, your experience, the property, loan amount, equity required etc. You could do a straight JV split where the investor brings all the money and you do all the work and split everything 50/50. This arrangement works well in a lot of situations.

@Jeff Tyndall there are many ways to structure JV partnerships. It can simply be a 50/50 split. Or it can be a simple debt loan paying them no upside in the deal. It really all depends on what your investors are looking for. You have to drill them with questions that essentially address their needs and wants, then take it from there. Good luck

@Jeff Tyndall I am in the same boat right now. Active military and retiring in 2020. I’m very handy and currently work on the side for a management company doing repairs. I am actively seeking rentals or flips but do not have the capital. I’ve found an investor and we are working on hashing out the details. The investor does not want just a loan, they want equity in the property as do I. I will be bringing the sweat equity and management. I’ll be following to see recommendations.

@Tj Hines if you were in my position (and to be brief, I have extensive experience in acquisitions with a great portfolio. I have a full-time contracting crew, and I do all project and property management. I have a lot of references) what kind of questions would you ask a potential financial investor?

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