Advice for partnering with out of state brokers/partners?

[Bruce P.]

Hi BP,

I'm new to the multi-family investing space. I'm trying to make it a point to meet more new potential partners in the space. When you're acting principally as the "money man (or woman)" in a two-person deal:

1) do you have any advice for how to vet your new partner who will be acting as the "sourcer" for finding multi-family deals out-of-state? (e.g., they live in an area like the south or midwest where they can source good deals and you are acting as the person bringing the bulk of the purchasing cash).  There's the obvious advice of hanging out with them for a bit and getting a "feel" for how they like to do business. But it seems the only way to really see how well it's going to go is to take a chance (hopefully on something small) and see how it goes, wiht plenty of contractual line items written out.

2) How do you like to structure the deal, esp. if it seems like it good be a good long term fit? 

[Alina Trigub]

@Bruce P.

Do your due diligence on your potential partners by verifying their personal and career facts (some or most), ask for references, consider working together on a smaller deal, discuss and align on long term plans. As far as the structure TIC will probably be your best bet, but you should always consult with an attorney.

Also, when getting into a contract make sure you hire an attorney even if the state doesn't require one and have attorney spell out in the operating agreement all roles and responsibilities as well as various "what if" scenarios like "what if one partner dies or becomes incapacitated".