Advice on structuring a partnership - Denver CO.

[Sam Cain]

Hey everyone. Writing to you from Denver, CO. I am looking to partner with a friend and his wife who are newly interested in real estate investment and have a strong cash position (currently 60k, or more if needed which comes from their parents) from the sale of their townhome. They upgraded from the townhome and overpaid for SFH which carries a sizeable mortgage payment for their income. For me this would be my first property. I have no debt and good chunk of cash, 25k. Our goal is multi-family and to buy 1 property a year for 10 years. We are getting approved for a loan amount currently. I know on my own I am approved for 330k but together with these two it may be less if not the same due to their DTI To add to this, my girlfriend just bought a property that her and I intially thought was going to be a cash flow rental (it still might be) but its looking more and more like a flip. I am going to sign onto the deed soon as I will be proposing, and I have all the cash (she has only a few thousand to her name but great income) We will finance the rehab (15-20k) Considering these facts, what are some ways to structure this potential partnership between my friend who has a sizeable mortgage and a large cash postion and me who has the ability to qualify for the same if not more on my own, but not as much cash as him and her. Obviously we want to ensure all parties money is deployed the most effectively. We will be doing most of the work ourselves. Since this is my first property how does that plan into it? Also, we would like to hold onto as much of our cash as possible.

Thanks for reading this far and look forward to your responses.

[Christopher Salazar]

Sam, if you're putting in most of the work yourself and can qualify for 330K, you don't need a partner, in my opinion. You'd have to deploy your personal capital, but then you wouldn't have to split the deals. Plus, if you buy right, you'll be able to cash out refi and keep turning that money over. 

In your situation, with you doing the work, it seems more appropriate to enter a partnership if your partner would fund the entire deal. Your skin in the game is your time, effort, and expertise in doing the deal. Otherwise, it doesn't seem like they would bring much to the table. 

I would first look at your overall goals and evaluate what you are trying to accomplish by investing in real estate, and go from there. Once you have specific goals in place, you'll be a lot more clear on how you want to structure a long term partnership.