How to create a partnership the right way?

Question

Hello BP,

I am looking to get into a partnership with a friend of mine as we start our RE journey.  We are looking to buy a rental property together.  We understand that this partnership will end some day whether we sell or just move on to other things...and we want to make sure we end with a 'great' note...not bad.  With this, a few questions came up...

1- In general, is there a basic "check list" to creating a solid partnerships?  (e.g. in general, what responsibilities each person takes on, what things we need to watch out for, etc...)

2- Should we hire a lawyer to create an agreement/contract between our partnership?

3- We plan on going to a bank to help finance the property. (we will both put even amount of down payment -skin in the game)  Can we both apply for the loan or is it better to have one person finance?  If one person finances, how does that work legally about property ownership?  Just trying to think of all possible scenarios good or bad.

Any direction would be greatly appreciated

Thanks to all in advance!!!

Thomas S. · Answer

Hire a lawyer before you do anything else. You need a iron clad agreement where every possible issue is addressed in writing. Leave nothing in doubt.

Maxwell Lee · Answer

Thanks for that.  Can you or anyone give some examples of what I should be agreeing on?

I know for some, this is elementary, but I'm afraid I might miss something important along the way while i create my check list.  Lots of information i need to absorb around the RE world.

Many thanks