Business partners or not?

[Clinton Arbour]

I’m looking to start an LLC in REI (flip/rehab). As I’ve been networking, I’ve found that two of my friends have also been thinking about it. We’ve talked about partnering, but I’m just not sure if it’s best. I do trust them and I do believe our mindsets would compliment and benefit us. Thanks in advance for all feedback.

[Derek Diamond]

Hey Clinton.  Partnering is a great way to get started in real estate especially with flipping.  That said I just want to caution you with working with friends.   Make sure that you complement each other.  For example one is good at planning and one works well with contractors.  Working with friend can be hard because there is more there than just the business and business decisions.  Talk with them about everything and put as much as you can in writing.  This will see silly when you are doing it but it could help out so much in the end.  It is easy to stay friends when times are good but you will need to have a plan when that changes.  For example is one of you friends, one year in, wants to move and wants his money back you might have to scrap the entire project half way in taking a large hit financially.  Just plan it out, sit down with an attorney and you should be fine.  On a positive note, maybe you guys are friends because you work so well together and the three of you will dominate the real estate market unlike any of you working alone.  Just go in with your eyes open.  Good Luck!