Working on my first project with a partnership of 6. Spoke to the lawyer today about drawing up a partnership and operations contract. We spoke of getting a seperate 203k FHA loan for a multiplex under each of our names. Our investment vehicle will be the BRRRR strategy (Buy, Rehab, Rent, Refinance, and repeat). We will each be living in one of the units of our own personal investment.
The thing is that an FHA loan is for non-investment purposes. We were looking to create a promissory note in which would allow us to buy into each other's personal investment property after the refinance stage. In that case, we will transfer each personal property into the LLC of equal undivided shares. As far as funding goes, we would each be able to put in our own down payment in each of our personal FHA loans due to the having to have proof of where the down payment money comes from. We will also be putting in money into the LLC because the LLC could also grant a loan or investment to our own personal selves during the FHA finance for any other expenses that may come up.
For example: I personally begin with one residential 4 unit apartment. After each property is refinanced I am in an LLC partnership owner of 6 investment properties and a total of 24 units... How we will begin.
How we will go about acquiring the properties, running the numbers and doing our due diligence is another story.
I would like to network this idea with as many of people as possible! Questions, concerns, constructive criticism, etc. Please!
I've yet to delve into the partnership stuff as I'm a control freak... But honestly, this sounds very very convoluted to me.
The most important question I have is who has decision authority?
You'll have a lot of decisions to make.
Who is passive and who is active?
How do you avoid the freeloader problem?
Do it on your own if at all possible..............................
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