Parents want to invest and so do I.

[Robert Ian Oldroyd]

Hi BP, 

So Im a senior about to graduate. Im already married and my wife and I are very excited to get started in this line of work. Im a firm believer that if there is a will, there is a way. 

A possible opportunity showed itself to us recently and I wanted to get a few opinions. Ive been talking to my parents a little about REI and it seems to have peaked their interest. My parents want to put their money into an investment property. They have a lot more capital than we do and excellent credit. How can my wife and I use this to our advantage? How can we make this a good partnership?

Thanks in advance for any help!

[Thea Linkfield]

@Robert Ian Oldroyd I am in a similar situation. I have been interested in real estate for a couple years and purchased my first flip over a year ago. My parents have done a handful of flips/rentals throughout their life, but pretty conventionally and not aggressively. I've done a lot of homework on my end and peaked my dad's interest even more than he already had. As a result, we've gone into business together on a flip. 

Working with family can be like walking on eggshells. Having 2 people in charge can be hard, so establishing one person in charge of certain decisions from the beginning would be beneficial. 

For our partnership, we've both brought something to the table. I brought thorough research, aggressiveness, and some capital, and he's brought more capital and wisdom. We have no written contract, just verbal understanding of how the deal will pan out (because our relationship is strong like that). But establishing the profit split at the beginning was essential. As the younger, less experienced person, I offered less profit for myself in order to use his capital and build my portfolio while doing so.

The one thing to be cognizant of is working with family can put a strain on the relationship. You must both be on the same page and be able to separate business from your familial relationship.