Partnership Agreement templates

[John Garrett]

Hi everyone!  Long time listener/first time poster.  My name is John and I live in southern Maine.  I've found a very lucrative, high cash flowing business model that I am interested in scaling.  I have two houses now that I rent on Airbnb in the busy summer months, and rent to college students for the remainder of the year while school is in session and tourism is low.  I have a few friends that are interested in investing with me and I'm trying to put together a partnership agreement and was hoping some bigger pockets members could share their agreement models that have worked for them.  The basics are that I'd like these friends to take the loan out in their names as a "vacation home" so we only need to put 10% down.  We would split all profits and losses and operating costs etc.  In exchange for them putting the house in their names, I would do all the property management, interaction with guests and tenants etc.  Am I creating too much work for myself without enough return?  Should there be a specified amount of time I commit to doing all the active work (5 years?) before I either take a commission (10%?) or hire someone else to manage it for us?  How does one address if/when one of the partners wants out or to sell?  What about if/when one of the partners dies?  Just looking to make some bullet points to discuss and agree upon before going to a lawyer to draw up the paperwork.  Thanks in advance for taking the time and any advice or guidance.  John 

[Drew Sygit]

@John Garrett were not any type of auditors, but telling everyone your friends are going to commit mortgage fraud by buying a second home they will rent out for more than the two weeks per year that the IRS allows, is not a good idea.

That aside, make sure your agreement covers not only splitting the profits, but also who is in charge, penalties for not paying their share of losses, and most importantly, how one of you can get out of the partnership.