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Updated about 12 years ago on . Most recent reply
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Family and friends as investors/partners/financiers?
Hello,
I am a fairly new investor in Baltimore MD using a cash buy and hold strategy for residential properties. My business partner/mentor and I basically purchase houses between $10-20 thousand fix them up ourselves with the help of a small crew of laborers and then rent them out for between $800-1000/month. The turnaround time for each property is about 4-6 weeks from close to signing the rental contract. My partner has been doing this for over 10 years and is able to buy more than a house per month with or without my help. I on the other hand have only been able to purchase 1 house with his help basically going 1/2 with him on all aspects of the deal from start to finish.
I have recently had a lot of family and friends want to partner/invest/get involved in this strategy. I know the extra cash will definitely help move the ball along faster even if I’m taking in even less of the profit for myself but I have no clue as to how to structure a partnership like this.
Is this type of partnership a good/bad idea in this scenario? Can you recommend any reference material that may help me out? Are there any other finance solutions that you know of that I should look into that would complement this strategy?
Any help/insight would be greatly appreciated.
Thanks.
Marco.
Most Popular Reply
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I think the simplest way to set up the $ value of the actual work you are doing? How much would it cost if you had to pay someone else to do the work? What value does the business gain having you do the work vs paying a contractor or laborer
Also keep in mind if you have a more experienced partner with deeper pockets who wants to work with you and help you get started, are there things he brings to the table that you might not be? Do you want to work with him on future deals, or is this just a one time shot?