Hey BP. Doing my first Partnership with someone I met on BP. We will go in 50/50. He found the deal and secured a HM lender for the 80% based and secured on the property itself. I will pay the 20%, fees, closing, EMD, Rehab costs and we will work together to get the rehab done ourselves and with professionals. We won a tough Hubzu bid and intend to rehab it to flip in 4 months time but also consider to hold.
Question is, how should title to the property be held? Dis/ advantages? In his name alone, or both of us? Do we need an LLC together or each one an LLC or just in our personal names? Tax benefits? I would like my money back out as it comes from a Heloc I have to pay back, and I try not to have this hit my Debt to income for my preapproval with a bank to buy more buy and holds in Indiana. Does holding a Title interfere with that?
We wrote out a contract with all details following a BP partnership template. Will that contract supercede everything else? What did you find important to mention in it? Buy out clauses, ...We intend to be honest and nice and hope not to need the contract anyways, but death clauses and such are important.
First you need to consult with your attorney to draft your partnership agreements and security instrument for the money you are investing.
Consult with your accountant on tax implications.
Each of you should have your own operating LLC that will be members of the property LLC.
Holding title will not affect credit only loans in your personal name.
Last Sentence, good answer. So would you suggest me being the money guy to also be on title?
Is there a reason you would only recommend buying with the LLC for a short term flip? In this case we are talking 3 LLCs for 4 months. Or can they be reused thereafter.