All Forum Posts by: Dan Smith

@Todd Heitner - You hit the nail on the head with how we are planning on breaking down the payments.  We will treat them as expenses.  Sorry if I wasn't clear with my explanation the first time around.  I also understand putting everything in writing, (Much like a lease), if it isn't written down, it's not fair game.

We plan to separate all of the money into the business and pay from that account.  I appreciate that you explained the two trails of thought as to distribution of profits.  This is specifically why I posed the question, I want everything to be fair for both myself and my (future)partner.

I think that was a great start to the thread and I hope more people bring their insights:)

Hey BP, I have a friend who I have been speaking with about partnering together with and I was hoping for some advice on the matter. We are looking at contributing 50% each to fund a new deal and we wanted to make sure we did it all the best way. We are thinking about starting an LLC and buying the property through that entity.

I would take on the property management side of the business and he would take on more the year end closings/book keeping/taxes/financial breakdown side.

We are trying to figure out a fair way of distributing out money and compensation for different up keeping procedures.

So far we have thought of two main fees - Property Management (I am hands on with my current property, so he would pay me to continue doing so with our joint houses), and Tax Prep (He is a CPA, so I would pay him that).

I am curious to know what other partnerships look like in a similar situation and if anyone can provide further insight.

I.E. what's a reasonable fee to charge for property management? We are in Eastern MA, I am happy to do research on my own too, but I'm also hoping to get some guidance or learn from someone in which direction to start.

Any and all insights are greatly appreciated!

I'm especially excited to hear what did and didn't work for people who have been through this situation and what some after thoughts are on the entire idea of partnering.

@Justin Silverio, this sounds great! I hope I am around to make this.

Glad to have another member in MA on here @Kenneth Dai!  BP is a great resource, and my go to for info with my rentals:)

@Matthew Ryan - Welcome to the site!  I bought my first 3-fam in December 2015 and it's been a relatively easy ride so far.  I tell all of my friends that they should at least buy a duplex as their first home.

My simple advice to you is to try for a 3-4 family as your first home.  Since you're living there you get all the benefits of being an on-site landlord, and with all of the benefits of more than one extra unit.

the costs aren't much higher from a 2 to a 3, and the benefits are substantially more.

Just my .02 but welcome and feel free to connect with me to discuss further, I'm in Haverhill, MA:)

@Aaron Samuel, Worcester is definitely a market I would look at as well.  You're going to need a lot less capital to start there and it's actually a pretty solid city.  Just make sure you familiarize yourself with the different neighborhoods before jumping in!  The quality of neighborhood changes fast in Worcester.

Welcome!  Be sure to keep us up to date on your happenings:)  Also, even though you sound like you have some experience, definitely check out the different blogs/posts/podcasts/etc. for some cool ideas and helpful information.

Good luck!

Also @Juan Pablo Ceballos, if you tag someone when you respond, BP will notify that person.  So for instance...if you wanted to tag me you would type @ and then start typing my name after the @ symbol.  It will then automatically give you a list of members that you can tag.

I'd be happy to share the paperwork I have with you if you would like...  There are a lot of forms to have to protect yourself in MA!!

Welcome @Juan Pablo Ceballos!  You've come to a great resource for figuring out the world of real estate:)  I'm up in Haverhill, MA.  Just make sure you really understand the laws in MA, as this is known as one of the harder states to be in.  Don't let that deter you though, as long as you're careful, you will be fine.

welcome to BP @David B.!!  I actually used to live in Worcester.  We moved out of Worcester to Haverhill, MA when we bought our first three family back in December of 2015.  I tell my fiancee frequently that I would love to go back to Worcester and buy up property because I see a lot of easy money potential there.  I had all the same concerns as you when deciding to invest in MA.  All of these concerns can be mitigated greatly by really focusing on tenant screening.

For #3 - Remember that you don't have to rent to the first guy that gives you a call, I probably spoke to about 20-30 prospective tenants on the phone before I agreed to actually let one of them come see the place.  Trust in the fact that you need to be completely comfortable with someone to make the relationship work, and it will!

For #4 - You need to be upfront with tenants and let them know that you are new to the house and you would appreciate any reports of broken/malfunctioning equipment, so you can get it in working order for them.  This may result in tenants trying to take advantage of that and trying to get new things, so obviously take each issue with a grain of salt.

MA is definitely a place that has it's issues, but if you drive through those, it should make you some good money.