Experience with multiple people (an LLC) purchasing properties?

Question

Hi everyone,

Have any of you had experience, positive or negative, with purchasing investment homes in a group? Was it difficult to get financing? Etc

Any advice, tips would be helpful before going on this possible venture.

Thank you!

Charles Carillo · Answer

@Armando Carrera

Typically, when purchasing investment properties with a couple of other people, it is easier to get financing since there are more signers, more assets, more experience (hopefully), and more income that is backing the loan.

The potential downside of purchasing properties with partners is that you are purchasing properties with partners. Real estate is a long-term investment. You will be partners with them for 3-10+ years in many instances. There are a lot of questions you need to ask to make sure everyone is on the same page. DM me for a list of questions.

Shafi Noss · Answer

One of my partners is a GC in Wisconsin and we purchase flips together. He has final say on the rehabs with my input and I have the final say on financial decisions with his input.

Mutual respect, cooperative personalities, and good communication mean we never have to rely on those roles or rules to make decisions together.

Another partner is much wealthier than me, but again respect and communication mean he takes my input seriously and I feel very comfortable accepting his decisions, even if it differs from my input.

These deals have generated millions in profit, and I've had a high quality of life working on them. I think that respect and communication has allowed us to work in in a fulfilling environment, and make high quality financial decisions.

Marcus Auerbach · Answer

Don't do it. Every business partnership I have ever seen, broke apart at some point. And it's often not pretty and ends in a fight or in court. Especially painful if you have shared ownership of real estate. That's like a divorce - who keeps the house?

If you have a situation where it makes sense to partner, make it a limited time arrangement with a designated exit point and pre-defined exit terms. If it worked well for both, you can decide if you want to do it again.

Experience with multiple people (an LLC) purchasing properties?

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