Partner investing on buy and hold

[Jacob George Lada]

Hello BP, question about investing with partners on buy and hold real estate. So the situation is, a triplex for sale 290k. The real estate agent I'm working with asked me about partnering with him and 2 other investors. The deal would be the group would form an LLC, put in an equal amount down payment for 30% of the purchase price, self manage, and then after all expenses split the profits 4 ways. So my question is, would it be smart to go this route? Or, go ahead and purchase myself since I will have enough for DP and closing on this property. Thoughts?

[Clark Kirkpatrick]

If you don't have a lot of experience, or don't want to blow all your money on a single deal, then partnering could be a really good way to get experience while limiting your risk. Be very careful with the operating agreement though - make sure it's very specific about who is responsible for what. Are you all self-managing? That seems like a bad idea. Someone specific should be responsible for specific management tasks. Also, if you're all inexperienced, that might not be good. You should have someone more experienced that you to partner with, if you're new to this.

If you're confident about your ability to handle the whole thing yourself, and this would make a good deal for you, then maybe just go for it! Spend your money and start collecting rent. You'll assume all the risk, responsibility and payoff. There's a lot of tradeoff here.