About Joint venture investment

[Cathy Kirkwood]

I met another investor who is from a different state at a national conference.  We had dinner once and followed up by couple phone calls.  He proposed to do a joint venture investment in a single family  project  in a third state where he is familiar with the market.  Each party contribute 50% of capital and share benefits equally, and if the house need further repair, he is going to do the rehab work (he is an expert in it). This is the first time I have encountered this, how should we structure the partnerships to ensure no future problems? 

[J Scott]

Don't do it.

I've written plenty about partnerships, when you should (and shouldn't) be considered, and this is a classic example of a bad idea.  You don't have a lot of experience (so you don't know what you don't know), you don't know this potential partner very well and the deals are in a market you don't know well.  That's all a recipe for disaster.

If anything, consider loaning the money for a security interest in the property and a reasonable return.  If that works out on a few deals, then *MAYBE* consider an equity partnership.