Have you bought investment properties with business partners(s)?

[Ho Eun Park]

Say you found a really good deal, and you are starting out or have many years experience in investing in rental properties via self management or using the management companies. Pretty much in any scenrios. 

Would you ever buy rental properties (multiple units that cost few millions) with business partner(s)? Business partner(s) can be friends/family members/spouse if you keep things as seperate properties/or through other connections? 

I'm just picturing a scenrio where you have 200-700k and your potential business parter have 200-700k for down payment for 2-15 million+ multi unit properties.  Is that feasible? Would it be good to make it as a living trust or under corporation to have enough for expenses and distribute rental income?

OR never do that and just keep it small until I can purchase it on my own?

[John Warren]

@Ho Eun Park this is a challenging question indeed. I personally ended up buying my last two Berwyn apartment deals with partners. Both times I would not have been able to afford to invest in the opportunity myslef, so partners were the only way I could get into the game. Partnerships are kind of like a marriage in that over the years you learn a lot about a person. The positives are that you get two different skill sets that allow you to see opportunities and think more strategically. You also have someone to bounce ideas of off. 

The negatives could outweigh the positives in some cases. If your partner is not ethical you could have real issues, and there is also the possibility for one partner to not pull as much weight as the other partner. I have fortunately not run into this issue, and feel blessed to have had partners thus far who are smart and hard working, but I am keenly aware of how miserable things could be if a partner was not good. 

The last thing to think about is the "roles and responsibilities" of a partnership. If you are using 3rd party management this will be a non issue in most cases. My partner and I chose to self manage our 9 unit, and we are constantly re-evaluating roles and responsibilities to make sure both partners feel like they are not doing too much of the load.