Starting a rental investment business
I want to go into the real estate business with my son. The idea is to buy a couple of rentals and then see how it goes. If we work together well and make money we might want to expand. My question is how do we go about structuring the business?
I have some capital, enough to finance the purchase of the first couple of properties, my son has none. Down the road if we want to borrow money, I would look a lot better on a loan app. than him. His credit is good, but he is young and does not have a high income. My son is a hard worker, very excited to do this, and I am sure will be putting a lot more time into this venture than I will. I don’t want to give him money, I want him to earn it, but I am certainly willing to take a bit more risk with him than I would with someone else, and he is quite trustworthy. I financed his first home and he repaid me never missing a payment and refinancing as soon as he could afford it. Long term I would like him to have a good business, but until I pass on he needs to earn his piece of it.
I see a lot of issues here from taxes to liabilities to who owns what, and I am a loss as to how to begin. I know how to buy and rent properties, but not how to set up the business. I have owned a few rentals over the years, but I have never taken on a partner or incorporated or anything so this is new to me. Any suggestions as to where to start would be much appreciated.