Future business idea and growth

[Michael Sherwood]

Hi all

I need some assistance from a business prospective and I need some advice.

Currently our company is structured 50 50 my partner and I put in equal capital to start the business. I was set to do a lot of the fix and repair work but the business has grown so this is not as feasible with a full time job ( and family ) We are now hiring out more of the work which is great because it gets done faster and more time effective for both partners. My partner using an LMA to finance some of future growth plus we are using any retained earnings to pay down this LMA and/or finance additional properties. Unfortunately, Rental property purchases become capital intensive and we can't purchase new properties as quickly as we would like.

We are now doing some flips with someone we met on BP which we will use the capital from those deals to pay down the LMA / to finance more properties and do more flips. Our core business is multifamily rentals but we would like to learn more on the flips.

We are considering adding 2 other partners on the rentals (which would give us more access to capital via more LMAs) They would not be part of our current partnership but would be on future deals ( with those two others forming a separate partnership) Both of these new partners are family of my current partner so I am a little concerned. Not only that my current partner and I would give up 25% on future deals because essentially there are two entities with 2 partners each.

I honestly am not sure if sacrificing how our business runs now for more capital (just wait until we have more money) is a good idea. Any of you guys have any experience in this? I would assume it would allow our business to grow at a faster rate. If we can't do a deal its 50% of 0 where in the other case 25% of something is better.

The other thing that I forgot to mention I think these people will be more 'silent' partners as they do not have the skill set or desire to do the work. As a fellow BP member says "too many cooks in the kitchen is not a good idea"

Thanks all,

Mike