Shaping the Partnership agreement with a Money Partner for flipping
I am forming a partnership with a money partner that wants to partner with us to do residential rehab/re-sells and commercial multi-unit re-positioning. We will be selecting opportunities that provide transaction income at first and moving towards wealth building/holding with a split ownership of any properties that we hold.
I'm looking for input on guidelines for shaping the terms of the partnership agreement. The operating agreement for the new entity is handled. I'm looking for ideas, suggestions on shaping the terms of the partnership and the divorce.
-The entity will be made up of his S-corp and my LLC.
-I will be the managing partner finding the deals and managing their completion from start to finish.
- He is 900 mile away from me and the area that we will be investing in
- He has nearly zero experience in real estate
- The new entity's bank account will be furnished 100% with his capital for investing
- I will keep 25-40k cash on hand for buffer to cover for screw ups, cost and expenses that I should eat
- The Split of all proceeds is already decided
- He maintains ownership of the initial capital infusion
How do we provide protection for him on the joint bank account so that I don't just make a large withdrawal and go on a bender? Double signature checks can easily be forged and cashed and would add significant logistical problems for operating on the ground during rehabs.
The pieces that I need help shaping is language around the divorce, roles and responsibilities, losses, his initial capital investment, etc and all the other things that I am ignorant to.
Thanks for any input that you can offer. If you have any examples of partnerships like this that I can model or any personal experience that you can reference, that would be very helpful.
Thank you.
Ian