Partners/friends/investors in real estate

[Joshua Garcia]

Hey ! So I became a landlord when I was 19. Bought a triplex in LA house hacked that. Then. Duplex. House hacked that. Then a deal fell through and kind of scared me. Now I’m back in the space of getting rocking again. I have a few friends who’ve seen my entrepreneurial spirit and look to me for advice. They want to invest with me. I don’t have enough money to invest yet. How can I structure fair deal where I do the work and they do the money? Is it fair to get a 50/50 return if I put in no money ? 70/30 ? 60/40? I have 3/4 friends with anywhere between 25k-100k.

[Tyler Gibson]

@Joshua Garcia I assume you like these people? Doing business with friends and family can be tricky. There is risk in this game. Hopefully you mitigate as much as possible but there is still risk. Best advice I can give you is have an honest conversation with your friends. Share with them all the good things about Real estate and then share all the bad, all the risk. I know that many investors including myself talk about all the successes we have had and gloss over the risks, failures and heartbreak in between the wins. Don't sugar coat it and then be honest with them about the split. If you think you deserve 50% say so and then negotiate. Above all make sure everyone is on the same page and happy with the agreement then put it in writing. Have everyone sign the written agreement then give everyone a copy for their own records so no one can forget if they get 40% or 50%.