Partnership - Ways to hold title, conventional financing required

2 Replies

Hello BP friends!

I am planning to partner with a friend who will provide 20% of money for the downpayment, while I get conventional financing for the 80%. My question is: How do we legally structure the partnership to reflect the ownership (20/80)? Can we split it as such on the title? Or are we forced to have one person on the title, while having a separate partnership agreement?

Thank you!

@Matt Gogh ,

There are various ways to do this. Are you also sharing the net income/loss 20/80? If you are, you actually can draft generic agreement.  If you want to keep it simple, keep both of you on the title. 

If the allocation of income/loss is not based on the capital contribution percentages, it is best to get a professional and draft a  partnership agreement. Just dividing up the expense and income might not create a partnership, but it is best to have an agreement in case of disagreements and various other disasters. 

Talk to lawyer Matt. Partnership gets complicated as you contribute property, and you being on the loan personally loan makes it more complicated.  

@Ashish Acharya ,

Thank you for your response! Yes net income/ loss will also be shared accordingly (20/80). If we split up the title accordingly (20/80), would my partner also need to be on the loan? Will his debt-to-income also therefore be evaluated?

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