Partner Structure For Apartment Building Help

[Matthew Gardner]

Hello BP,

I have located a 45 unit apartment deal. I have the ability to fund the deal myself, however I find it will be advantageous to have two partners in on the deal with me due to the amount of renovation and management that will need to be done.

We plan on splitting everything 1/3 each.

What is the best way to structure this deal in case one person decides they want to get out of the deal itself? Do you set hard lines (refinance at year 4 and offer way out at that time?) or offer them to be bought out at any point?

Thanks for the help!!

Matthew Gardner

[Jillian Sidoti]

First and foremost, if you have a plan to keep the property for so long, then you ensure everyone understands that and there is no "getting out." Everyone needs to be in it to win and can't let their cold feet or regrets effect everyone else. 

You should have in the agreement that if someone MUST get out, that 1. The other partners have right to first refusal. 2. That the exiting partner must solve their own problem. 3. The other partners must approve the exiting partner's solution. 

good luck!