Partner Wants to be Exclusive, I Want An Open Relationship

[Anthony Wick]

Ok, so I’ve recently begun looking at taking on some partners so that I will be able to do more deals. Mainly buy and hold, but the option of flips could arise in the future. I now have two people that are willing to put up some money. Out of state money partners The plan was, everybody gets a piece of the action, with the bank still financing a chunk. Profits after expenses are split according to who puts in what percentage. Seemed fairly standard. Now, one of the partners wants to do the first deal with just me. Perhaps he’s thinking a bigger profit? Perhaps he has some trust issues? Well, the more I personally spend on the first deal, the less cash I have to go around. So, if push comes to shove, do I go ahead and do a 50/50 deal with him? What if that alienates the other partner, who wants in on a deal ASAP?

[Brie Schmidt]

@Anthony Wick - I have 3 partners but I structured it 1:1 with each of them and I would not have done it any differently.  It allows me to manage each relationship differently and autonomous of each other.   So if one partner wants to sell it would be just for the properties we own the two of us and would have no effect on the others.  

Buy and hold is like a marriage, and you are in it for the long haul.  If one relationship goes south it is contained to just that partnership.