partnership ideas and set up
I'm looking to get advise about setting up a partnership.
What specific questions do you have? What are you trying to accomplish? What are your current roadblocks?
The more specific you can be, the more the community will be able to help.
My biggest thing here is always start a partnership with the end in mind. There will always be an exit, either by desire or by death….yeah sucks but we don't live for forever, and we usually don't have the same mindset for forever. Someone, either you or him or her, whoever is in the deal, will one day want their money out of the deal / property / LLC / whatever. Knowing that, planning for it, anticipating it, is everything.
Second to that, think long and hard about the value of time vs money. In the beginning, finding a money guy feels amazing…eventually, you might resent doing EVERYTHING and recognizing that the only thing the other person does is bring money might seem like not enough….the value of your time might grow to transcend money….
Pencil out what you're both looking for and make sure it aligns. Then get a lawyer to help draft that formally. That's been my process.
A LLC is a great route to take when structuring a partnership. As stated above we don't live forever so even if there is never an issue between partners there is still an end to the partnership eventually. With that said a LLC with a good operating agreement can help to alleviate most issues by anticipating them.
With that said, a good operating agreement is going to typically require an attorney who specializes in this type of work just because templates typically don't address all possible issues that can come up.
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#2 Short-Term & Vacation Rental Discussions Contributor
- Olympia, WA
Hey @Doreen Romano, I agree with most of the comments here. Get a good lawyer and lay out all expectations so there is no surprise later.
Regarding the LLC or an LLP for a partnership, isn't a bad idea, but it eliminates the conventional mortgage route. You will have to get a commercial loan if the property is held in an LLC/LLP. That means higher down and higher interest.