Rehab partnership

[janetmontano]

A few investor friends are thinking about starting a rehabbing partnership.
Does anyone have experience (good or bad) with this topic?
We are trying to figure out how to make it equitable for everyone as far as work load and sharing profits.
Thanks,
Janet

[Dan Auito]

A few investor friends are thinking about starting a rehabbing partnership.
Does anyone have experience (good or bad) with this topic?
We are trying to figure out how to make it equitable for everyone as far as work load and sharing profits.
Thanks,
Janet

Hi Janet, they always say don't rent to friends or family because you'll usually lose one or the other as well as your money, so just know that, that old time worn saying is the result of experience. :SM137:

Let's say you're willing to explore further (which you should) Anytime you go into a psuedo partnership you'll want to sit down and get everything in writing, verbal commitments have a way of fading out as the situations evolve.

I personally like to choose partners that are very good at things that I am not, this way everyone adds their skill set to give the group a more well rounded team effort.

If your going to accept all comers as they are friends than get them to write down their best skills and start to figure out who will be responsible for what aspects IE,,, Book keeping, scheduling and monitoring contractors, who is in charge of buying or authorizing final say on materials, who will be the primary negotiator in closing the deals, what will be your criterea when buying property? Are you going to split the net proceeds equally or on a percentage basis, based on each individual partners level of involvement.

The key is to get it in writing and have everyone sign the same sheet of paper once it is in final draft and acceptable to the parties to it. Draft your constitution and live by it!

Lawsuits, hard feelings and loss of friendships can happen but by stating facts and leaving out as much emotion as possible, you will be much better off.

There are a ton of boilerplate general partnership agreements around, so get one that covers the basics and attach your addendum to it, so it has all the added elements that your unique group requires. There is strength in numbers but you must have a very clear understanding of the responsiblities before going head-long in. Others are free to add to this topic, these are just my two cents as usual. :SM127:

[janetmontano]

Thanks for the tips. We are meeting on Saturday,s o we'll see how it goes!
Janet

[Dan Auito]

Let us know what comes of it Janet! This will be interesting.

[ChrisGA]

i know this is a little late, but

i would definately want to make sure the partnership was LLC, or a limited partnership with my personal llc as the general partner. This way i would retain my control'......

There is alot of issues to address. like money, dispursement of profits if and when, whom is what percentage of ownership and whom is the controling party. Just remember 2 roosters cannot control the same hen house.

[Just Information]

You need to be vary careful when your bring in multiple partners on a single project as you may be required to follow sec guidelines - vary suggestive if you have not played in this arena you should get the advice of a good real estate attorney.

[ChrisGA]

too many hands in the pot ruins the spoils

[janetmontano]

We just finished our first meeting tonight.
We decided to try a joint venture together to buy rehab and sell one house, just to see how it goes and if we can work together. It will be a small, inexpensive one. We're going to contact an attorney to get an agreement in writing for this one job only.
I'll let you know how it works out. Thanks for your interest.
Janet

[Frank J. Festa, Jr.]

Janet:

I am new to this site, could you tell me the State you are from?

Will your new LLC have a good Real Estate Attorney?

Regards,