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Updated almost 9 years ago,

User Stats

8
Posts
7
Votes
Kyle Warmouth
  • Cincinnati, OH
7
Votes |
8
Posts

Forming a Partnership

Kyle Warmouth
  • Cincinnati, OH
Posted

A little bit about my situation: I am new to REI but have capital to invest and have immersed myself in the education of finding good deals, executing deals, etc (primarily through BP!). I am looking to be slightly more passive though in my investment and have a good friend who has worked on some flips as a contractor for another investor. He would like to move past the contractor role and more into an investing/partnership role. We want this to be a long term partnership and both have similar plans for growth and expansion.

My question is, what are some typical ways one can structure a partnership deals, where one person is providing the capital, looking for the deals, executing the deals and then the other person is completely responsible for managing the rehab and repairs?

Should we just split evenly, 50-50 on the profits of our flip? Obviously, I have a bit more risk in that I am the one putting up the capital but he will be spending way more time at the property and with the rehab than me and will be compensated based on the profits of the flip. Should we be forming an official LLC or Partnership?

Really appreciate any insight into how one may structure a partnership like this.

Thanks!

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