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Updated almost 8 years ago on . Most recent reply

Partnerships - How to structure
Hey BP,
I've got a question about how you all structure partnerships. For example, say I want to partner with an investor. I would assume I would set up an LLC and we would determine ownership %s based on capital contributions or otherwise. However, I also know it's very difficult to get a loan when an LLC is purchasing a home.
So my question is, when partnering with an investor/friend/family member how do you legally set up the purchase to ensure cash flows are paid out as agreed? Do you both co-sign on the loan and simply have a contract that outlines how the cash-flows, capital expenditures, capital gains, etc. will be divided? Or do you transfer the home into an LLC after purchasing it?
thanks!
Most Popular Reply

What we do is we always purchase with an LLC, and then sign a Joint Venture agreement under that LLC. With that JV agreement you write in who does what and who invests what amount and stuff like that.