FORMING PARTNERSHIPS TO BUY REALESTATE

Phoenix, Arizona
Multi-Family and Apartment Investing
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FORMING PARTNERSHIPS TO BUY REALESTATE

Larry Fullard
Member since 2022 · 11 posts · 6 votes

Hello! As RE grows I'm wanting to do joint venture deals with friends and other like minded investors, can anyone list a structure or "book" that can be helpful on how to buy RE with other people involved. Ex. I have a friend who has seen me purchase RE and wants to team up on the next multifamily buy and hold purchase, he willing to put up about 70-100k, how should we structure the contract, do we both need individual LLCs or form a joint LLC, how do commercial lawyers play a part etc. Any books personal thoughts or experiences would be helpful.

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Todd Olson
Investor · Holmdel, NJ · Member since 2015 · 61 posts · 60 votes
4y

I just got done reading Raising Private Capital by Matt Faircloth. I have the same interests as you to look into structuring OPM. I would suggest you read it to get a better understanding on private equity and different types of loans to help you. 

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  • Todd Olson
    Investor · Holmdel, NJ · Member since 2015 · 61 posts · 60 votes
    4y

    I just got done reading Raising Private Capital by Matt Faircloth. I have the same interests as you to look into structuring OPM. I would suggest you read it to get a better understanding on private equity and different types of loans to help you. 

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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Larry Fullard
    Go over roles and responsibilities before buying anything with a partner. One of the biggest problems in partnerships I think is that a lot of people don't clearly define the roles and responsibilities of each partner prior and it leads to misunderstandings or things not getting done. 

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  • Matthew Cervoni
    Accountant · Lexington, KY · Member since 2019 · 100 posts · 66 votes
    4y

    If your partner wants to own equity (they are not just lending you the 70-100k) then usually the entity structure is a partnership LLC. You will definitely want a solid operating agreement and a plan for bookkeeping & taxes.


    Considering the amount of the investment, I think it would also be smart to use a lawyer and CPA on the front end.

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