Partnerships with Family, what boundaries to make?

[Sean Lynch]

Hello BP! 

I have been contacting family members to gauge their interest in future investments and have had some good feedback. Specifically, a brother of mine is excited to help immediately (which is a huge help for me getting started) but I want to make sure the boundaries and responsibilities of each of us are clear. I have no problem with being forward with him (He is my brother after all) but I want to make sure I'm not missing any questions/statements that should be made, as well as treating him fairly as an investor. I have experience with contracts and will be writing a legal agreement between us (Overkill maybe but I want to get in the habit of doing things right early on) so any tips on what needs to be included?

He is going to be helping me with financing only. I will research, manage, and work on the properties myself (He is in another state entirely) so I was hoping to find out how some of you have set up this type of arrangement in the past. He will want to stay involved with the property long after his financial investment is paid back, to get the most bang for his buck which I'm fine with, but I want to create clear expectations for his future return. I want to keep him enticed/rewarded enough to stay involved down the line but want to make sure I don't over-promise and stall my future plans. 

I really want to make sure I do this the right way since I'll be working with family.

How have you guys handled similar situations and what boundaries, expectations and roles should be specified?

Thank you,

Sean.