Tips for structuring deals when leveraging OOS partnerships?

[Rochelle Duong]

Hello,

Investor from California looking to leverage a potential partnership with someone from the Kansas City, Missouri Market. Met my potential REI partner through a mentor and we've all been meeting weekly to get started on deals. We've already vetted eachother out and seem to have similar investing philosophies when looking for properties. My potential OOS partner would be "boots on the ground" and he was going to do the leg work, said he could manage repairs, oversee the property, and is currently in the process of obtaining his REA license. I have a steady income, excellent credit, and cash reserves, and have the time and knowledge to help touch base with him weekly. We were gonna go 50/50 into the deal where both of us contribute 50% of cash reserves for an initial down payment. One of the things I'm aware of is to have things written out and have an attorney look over contingencies that he and I both lay out, so that things are "fair."

He and I are both new at this; It would be his second deal (his first is his house hack) and my very first deal. Any tips would help so we can be prepare and make sure that this partnership works out for the both of us.

What are some of the ways some of you have structured out of state deals? What are some suggestions that I could do to contribute to this partnership moving forward? 

[Mike D'Arrigo]

Originally posted by @Rochelle Duong:

Hello,

He and I are both new at this; It would be his second deal (his first is his house hack) and my very first deal. Any tips would help so we can be prepare and make sure that this partnership works out for the both of us.

What are some of the ways some of you have structured out of state deals? What are some suggestions that I could do to contribute to this partnership moving forward? 

Rochelle, in my view, you are already contributing more to the partnership than he is. You are bringing in 100% of the capital while he is bringing in little to no experience. What was involved in his one house hack? How much work did it need? What was the outcome? Did he complete it on budget and on time? How much did he really learn from it? These are all things you should know. You are bringing in the cash and he is theoretically bringing in some level of project management skill. How much work does the property need and does he have the skill to manage it?