All Forum Posts by: Christopher S.

@Matt M. Thanks. To clarify, is it your opinion that the general idea of partnering with friends is a terrible idea, or is there something problematic about the arrangement I've described here? If the latter, do you mind elaborating on why you believe this arrangement is a terrible idea? I figured that, so long as we carefully structure the partnership and manage everyone's expectations (i.e., make sure we are on the same page), things should work out. But it would be great to know if I'm missing something.

"On the personal use side, get with your CPA, you have a limited amount of days/year you can personally use it if you want it to qual as rental property and get the better tax treatment."

Thanks for this thought, Steve. I had not considered this before.

Thanks Ebony. These are very helpful thoughts. I like the concept behind the structure you suggested, especially after we start generating income. Under your framework, would each LLC member also contribute equally to the monthly mortgage (in addition to having an equal 1/3 equity stake), despite the varying initial contribution amounts?

Bump. Also wanted to see if anyone had recommendations for small firm/solo real-estate attorneys in Virginia that could advise on the underlying agreement(s). Thanks.

Hi everyone,

First time poster here. I work as an attorney (in a field unrelated to real estate, unfortunately) and plan to purchase property in the coming months with two long-time friends, one who manages his parents' residential and commercial properties and the other who works in the IT space. Specifically, we plan to buy property in a secluded area (e.g., near Shenandoah National Park or in WV near the VA/MD border) that would serve two purposes: (1) a peaceful retreat from city life, and (2) a rental property for short-term stays/experiences (e.g., something we could list on Airbnb).

One takeaway from searching these forums is that we should, from the outset, have a detailed agreement in place to spell out the rights and responsibilities for everyone, such as decision-making authority, managing membership/ownership interests, etc. This makes sense. Aside from this, one thing I am unsure of is to what extent it would be beneficial to establish a corporate structure from the outset. For example, does it make sense to create a partnership or LLC, or is it sufficient to own the property as tenants-in-common and execute a joint venture agreement that governs our operations? Any thoughts or resources that folks can share on this question would be much appreciated.

We are looking at properties in the $200 ~ $250K range and plan to take out a mortgage with about 30 to 40% down, so that we leave sufficient cash for renovations and other expenses. One complicating factor is that we all plan to contribute different percentages of the down payment; we are thinking through how to account for that in the agreement (for example, the person contributing the least upfront may take on a greater share of the mortgage payments for a period of time, etc.).