Partnership buy outs

[Aaron Gordy]

Hi All

I have a question. I am involved in a project that initially started out as a flip so there is a construction loan involved and a good friend/partner. Throughout the course of the project as I was gc'ing it I noticed that the make up of the area was changing. We bought the project because I knew it was a home run deal. My partner is out of state. 

Real Estate investment requires a long term horizon sometimes. My partner is wanting out. I am wanting to stay in as I see how lucrative it could be in the future. My thinking is to get it appraised by a third party to figure out the value and then think about the ownership share so that my partner can divest equitably. I am a broker and can figure out the approximate value but I think in such a situation its best to turn over to a third party professional firm so that there aren't any hard feelings going forward. 

Just curious as to how other folks would handle such an arrangement. 

Thanks

[Levi T.]

I would just run some comparable comps and send it to the partner, let them make up their own mind type thing. If they want out, there is always the out now price, and the willing to wait price. If you don't want to sell, and he want's to sell, that's a deadlock. Unless you want to buy him out or sell, it's going nowhere, so make an offer and if he accepts.. well, done deal. If not, you two will figure out something.