Looking for a model business plan for a 4 partner 4 unit rental.

[Tony Roddenberry]

I'm putting together a deal with 3 other guys that want to build 4 SFD for long term rental. We are just getting started and have a blank slate to work with at this point. There is a LOT to be considered when you have this many people involved and I really want to get it right the first time. So I'm hoping someone reading this has "been there and done that" and is willing to trade the details of their plan and structure for whatever I can offer in return. 

Here are the players and what they bring to the table. 

First, we have a builder that builds both spec and custom homes . He is a second generation builder and is really good at what he does. He and I have also done a few flips together in the recent past that has worked out well for both of us. He will be bringing his knowledge and a undetermined amount of cash to the table. 

Second, is a guy that manages a large building supply company. He has been in the business for 30 years and is very good at finding good deals on materials and putting them on the job. He is new to the rental game and just put his second rental on the market. He will also be bringing an undetermined amount of cash to the table.

The third player is a Doctor that has had mixed success with real estate in the past. The last deal for him was a flip we done together. It worker out well for both of us and he is looking for more places to invest in real estate.  He will be bringing the majority of the funds to the table.

And lastly myself. I love bringing people together and putting deals together. I have done numerous flips and have been in the rental game for five years. I will be putting the deal together, helping the builder with construction and managing the rentals once completed.  

I'm hoping we can do an all cash deal to avoid paying the bank interest. 

If any has ever done anything close to this I would love to hear from you.

Thanks in advance for your input.

Tony Roddenberry

[Greg Dickerson]

@Tony Roddenberry I have done several deals with multiple partners.

First thing is to establish who is going to be the lead. One person needs to be the main driver for the entire project. This person would delegate tasks to the other partners and follow up. This person also needs to be the main point of communication throughout the project so subs and suppliers do not get mixed messages form different people. 

Equity is typically divided up pari passu basis or pro-rata share depending on how much cash is invested by each partner.

Things to consider:  is the builder getting paid for his services? How much? Are you being paid for management of construction and rentals? How much? Is everyone on board with their role?

You definitely need to discuss and agree on everything before you do anything then get an attorney to draft the partnership agreement that covers all of the details including buy sell if things go bad or partners want out.