How to legally protect yourself in a partnershp
Hey BP Folks,
Was hoping to get some insight on the current situation I am in.
So I am looking to get an off market 20 property package under contract from an older landlord looking to get out of the business.
I have found a hard money lender who is willing to partner with me on the deal, and come to the table with all the cash to purchase.
We are still ironing out details, but as of now its looking like he will be loaning me half of the purchase price, we will split the profits 50/50 (after expense budgeting), and I will pay back the loan each month with a portion of my 50% profits. He will own all the equity initially, but each month as I pay down the loan, I will "buy into" the equity. So once my loan is paid off, we will be at a 50/50 split across the board on everything.
My question is, are there things I need to be doing to legally to protect myself in this scenario, if God forbid something goes south after the deal has closed?
Of course I would do everything in my power to make this go as smoothly as possible, but I just want to make sure that I am covered as best as possible. Would this be looked at as a syndication in a sense, since I am not coming to the table with any funds, although he would be loaning me funds? Or if we lost money, would I be liable because I set up the deal/partnership? Since my partner would own all the equity initially, in theory would he be able to "kick me out of the company" if he wanted do? In analyzing the best and worse case scenarios, I am really just trying to understand my exposure in a deal like this.
Any general or specific advise would be greatly appreciated!!!