Hi BP Friends,
I have an opportunity to partner with good friends on a STR in a northern WI hotspot on the lake! I have the capital, and my friends have all the experience. Have their own management company and other successful STR's in their portfolio. I need some creative ideas on how to structure the deal if I provide 100% of the down payment and their company handles 100% management.
I want to be fair, and also want to keep our friendship and hopefully more deals for us! Thank you for your brilliant ideas!
Seems like a good way to mess up friendships.
That said I would get an attorney to draw up something. Put every possible scenario you can think of in the partnership agreement including how you would sell property and dissolve partnership. This would give you the best chance of staying friends in the future.
Why not just buy the property yourself and pay them to manage it?
That would test the business side of the relationship with an easy way to back out if it wasn't working (hire a new manager).
What @Alex S. said. Why let them in on your money? You really don't need them to manage it anyway, it's way too easy to do yourself.
But if you decide to involve them as partners for some reason...... a 50/50 deal is way too generous for you to offer them. Maybe 75/25.....? But why do it that way at all?
This makes no sense. What you're doing is assigning them more value than they have, but in realit they are a 'management company'. They typically get between 10%-25% of revenue for managing your property. That's it. You should own the asset outright, and simply hire them like any other business you'd hire. This is what 'evolve' does or any of those other ones.