Partnering with your Brother??

[Joseph Post]

So I partnered with my brother on my first deal this last year. It was a foreclosure in Tyler TX. I found it being sold by auction.com at the court house. It was an area I have been hawking for a while. After I found it I new I could not buy it by my self. So I contacted my brother to partner with. And secured financing from my father at 1% interest per month until we finished renovations and refinanced the property. I went and bid on the property. As it turned out the previous owner still lived there. I couldn’t convince my family to offer cash for key so the eviction process ensued for the next few months until my family realized cash for key might be a good idea. Our property manager made the offer and the previous owner was out by the end of the weekend. But unfortunately our manager did not like the condition the property was left in, so as per the conditions to leave he got no money. With good reason. The place was bad. At first we thought it was a house because there was brick on the outside. But on the inside it was definitely a mobile home with 7ft ceilings in all the bedrooms holes in most of the walls, wallpaper over wall paper in the living room and dining room that they attempted to remove. Major water damage in the utility room, wall to the master closet was gone....just gone, as well as the door to it. So you would walk from the utility room straight into the master bathroom. I mean why. Wires hanging from the ceiling in the master bathroom and no lights in the bathroom. We spent over the next five months and 26 thousand dollars later we are finished with the renovations and have turning over the property to our manager. There were quite a few challenges with the partnership. First was that both me and my brother live in other cities. He lives two hours away. I live four and a half while I am still in my last year of college. So most of the work was put on my brother for renovations on the weekends. It was not reasonable for me to travel to work on the property until the holidays, so no surprise my brother became resentful. And on my off between school I was not able to get much done because apparently there is a learning curve to doing the work yourself. At the end of December and beginning before classes started I started hiring handy men and remodelers. When it was all said and done the property rented within a week for 900 a month with some positive cash flow.