Pooling money together for investment

Member since 2023 · 14 posts · 3 votes

Anyone have any experience going partners with friends to buy property in an LLC and care to share experiences and insight? Ive been thinking about this the past couple years. Perhaps gathering 5 people together each putting in 50-60k and buying a 200-250k property with cash, or better to get mortgage? I can imagine the headaches that could come involving other people but I would think the operating agreement would be of utmost importance before getting involved. Thoughts?

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Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

You need to have everything mapped out and drawn up by an attorney. Ideally it would be whatever percentage you put in is the percentage you get out after expenses. But how do you make decisions on what needs to be done, what happens if one of the people wants out?

If you have $50-60K to invest, use that as a down payment on a home and get a mortgage for the rest.

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
You need to have everything mapped out and drawn up by an attorney. Ideally it would be whatever percentage you put in is the percentage you get out after expenses. But how do you make decisions on what needs to be done, what happens if one of the people wants out?
If you have $50-60K to invest, use that as a down payment on a home and get a mortgage for the rest.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
The most important thing is making all roles and expectations clear. There should be no confusion on everyone’s limitations.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Brett Ferrara
Operating agreement would be very critical as you need to determine how to resolve disagreements, but someone out who wants out, who is making decisions and running the day to day. When doing things like this just think of it as the equivalent of having multiple spouses…
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