Investing out-of-state with partner

[Vincent Park]

Hi all,

I'm a beginning real estate investor in NYC, and as the price point of properties in my neighborhood seem off the chart, I've tried looking out of state to invest in my first deal with a potential partner. Long story short, I've found a business partner that I would like to work together with to purchase a property. The property is a SFR, under $100K, and a decent rental property. I would be supplying the cash (down payment) and credit (for the mortgage), and my business partner would do all the remaining work (including property management). We agreed on splitting cash flow (rent minus expenses and PITI) and equity (at the time of sale) 50/50. As a beginner trying to learn the basics, I feel that this would be a great way to start. My business partner also seems to be pretty experienced in working with partners, and has walked me through the paperwork that would be involved (such as an MOA).

I wanted to reach out to experienced investors in BP for advice on how I can set myself up to enter into this JV. I'm sure that I would need a CPA and an attorney to help me out, but I would appreciate step-by-step advice on where to begin, and what to ask for (e.g., review MOA and other contracts, etc.). Some background information would include:

- My business partner is fine with either forming an entity to borrow money to fund the investment or borrowing under my name. The latter would give us a lower interest rate.

- I would be the title holder, so in the case my partner goes out of business, I would be the owner of the property.

- I currently own a C-Corp.

- I would like to position myself so that I could be able to work on similar deals with my business partner in the future.

Any advice, including tips on finding a qualified CPA/Attorney to work with and working with someone out-of-state, would be much appreciated.

[Alina Trigub]

@Vincent Park Form an LLC, enter into agreement as TIC (tenants in common) with this partner. This will give some flexibility to both of you in terms of entering/exiting partnership if needed. I suggest you borrow the funds under the company name and not your personal.

As for CPA/attorney, PM me.