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Updated almost 8 years ago on . Most recent reply

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213
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Charles Kennedy
  • Rental Property Investor
  • Philadelphia, PA
160
Votes |
213
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Partnerships - How to structure

Charles Kennedy
  • Rental Property Investor
  • Philadelphia, PA
Posted

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

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2,325
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911
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Antoine Martel
  • Rental Property Investor
  • Miami, FL
911
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2,325
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Antoine Martel
  • Rental Property Investor
  • Miami, FL
Replied

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.

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