Thoughts on early partnerships?

Question

Thoughts on early partnerships? Currently looking into a partnership with 2 others....

We are each considering a cash flowing asset (1k a month) and 50k each. Looking to scale at a steady and  pace and or bigger deals..

Thanks!!

Ian Walsh · Answer

I have found partnerships to be very similar to marriage.  I don't proceed into partnerships unless there is really good synergy and chemistry.

Jody Sperling · Answer

If you partner with anyone, spend the time, money, and energy to prepare a partnership contract. Every partnership ends, either when one or more partners die or one or more partners want to go in another direction.

A good contract ensures everyone involved exits the partnership with their fair share.

No matter how much you trust your partners, get the contract drafted and signed. Money and business always change people. If you're prepared, that change will be for the best. If you're unpreprared, that change will be for the worse. Best of luck to you!

Remington Lyman · Answer

When I started in Columbus, Ohio I partnered with my old college roommate. He then lost interest and I bought him out.

Recently a guest speaker came to my brokerage and she said that she partners on a lot of deals. I find it interesting that each investor has their own strategies with partnerships.

Steven Foster Wilson · Answer

@Jake Lefort When I was getting started in Real Estate here in Columbus OH, I was able to start without a partner. I was also able to purchase my second property without a partner. The benefit is I get to keep 100% equity and CF. However now im at a point where I need lending partners, people who can loan or get a loan.

So what can you bring to the table, what are your skills. What do you want in a partner, what skills should he have?

Jake Lefort · Answer

@Anthony Wick

Perfect thanks Anthony!

Jake Lefort · Answer

@Steven Wilson

What can’t you get a loan?

And thanks for advice!!

Anthony Wick · Answer

@Jake Lefort. My advice is to form an LLC with said partners. It is what I did. And, make sure that LLC Operating Agreement has a Buy/Sell agreement that maps out exactly what happens if and when a partner wants out of the LLC. Mine states the partner must first offer their shares to the LLC, then to both partners, then to each partner individually, then can sell to an outside person. Sometimes these things end without warning (like a divorce or death). Don't enter into anything without the LLC first. And, I would have an Attorney write it up. Ours cost $700, plus LLC fees for Secretary of State.

Thoughts on early partnerships?

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