Partnership with friends. Terms

[Dee Brock]

My friend and I are going to try and team up on some deals. I just do not know exactly where to start. We agreed that we will split everything 50-50. I am curious of people out there who have done the same and what kind of terms everyone agreed on. Who handles money? What do you do about cash flow? What do you do about the money when you do a cash out refi? did you set up a joint LLC? Just so many questions and I know that having a partner you can expand more versus trying to do everything by yourself. It's better to get 50% of some thing than zero

[Brian Bagdasarian]

Hammer this out at the beginning. My current partner and I bring some very different skillsets to the table. When we initially formed our operating LLC, we spent the time to draw up an operating agreement that clearly outlined roles and responsibilities. This can always change down the line (through a resolution), but there's a reason that the saying "great contracts make great friends" exists. One other suggestion - have a 3rd party that you both trust that can be granted 1%-2% of the company, that can act as your tie-breaking vote, if you ever arrive at a stalemate on a decision.