real estate partnerships

[Jack W. Wong]

Hey all,

I wanted to know if anybody has experience or input regarding mortgage partnerships?

I am planning to partner up with a investor in Houston on a multifamily project where he will be my boots on the ground as I live in NYC currently. He has 5 properties (mix of single/multi) under his own personal mortgages and doesn't want to cap out on his personal mortgages. he proposed a deal in which im the mortgage partner and we split the initial downpayment 50/50. If there any vacancies we will also split the mortgage payment 50/50. On our partner agreement contract there will be a indemnization clause. All profits/cash flow will also be 50/50 split 

To sum it up multifamily mortgage will be on my name but my partner and I will split 50/50 all costs including vacancies. He will manage the property manager and pay all the bills every month. I'm pretty much a passive investor.  If he decides to not chip in when theres a vacancy can I bring him to court and get the judge to enforce the indemnization clause?

Is the deal he proposed what usually happens during a mortgage partnership or is there

other structures of it?

P.S. This will also be my first investment property so through this partnership I hope to learn the ropes of investing first hand.

[Jack W. Wong]

@Drew Shirley@Jess Hewitt

Thanks for your input regarding the structure of my partnership.

After some discussion with my partner we came up with another partner agreement in which I would be able to protect myself more.

I would provide the seed capital; the mortgage will be on both our names. we will then transfer the property into a LLC. I will be entitled to all the income/cash flow until ALL my seed investment is returned. After that which the profits afterwards will be split 50/50.

My boots on the ground partner will find the property rehab it and handle day to day operations. What do you guys/gals think of this updated proposal?

And of course we will get a real estate CPA/lawyer to check over all documents.