Is it a good idea to partner up when buying rental properties?

[Johnny Rivera Loubriel]

The reason behind my question is because I’m currently a business owner and my income at the end of the year isn’t the best income to qualify for multiple properties. My goal is to acquire five rental properties per year so I believe my best option will be, is to partner up with multiple investors. Please help!

[Theresa Harris]

Do you know someone you can partner with who you trust and has a similar vision to you?  Biggest problem is making sure you are on the same page and have documents drawn up as to what happens if you disagree or if one of you wants to sell and the other doesn't.

[Peter Mckernan]

@Johnny Rivera Loubriel that is a great goal of partnering up with someone to get that income just right and be able to get the lending on the deals. You'll need to make sure all your ducks are in a row for who the partner(s) will be, what their goals are and what vision you both have together. I just got out of a partnership on buying some flips after not doing any deals together at all, but we formed an LLC together spent the money on the attorney to draft the docs, LLC, and OA for us. The biggest take away was to sit down draft goals with the person you are working with and just do one JV deal together and see how it goes. Don't make the mistake of putting the cart before the horse.

[Eric James]

Only if both partners absolutely need something that the other partner offers.

[Johnny Rivera Loubriel]

Thank everyone for the great advice. I do have someone in mind with very similar goals and I just wanted to make sure it would be a good idea. I’m definitely taking action on this. Thanks

[Shiva Bhaskar]

It can be a good idea. I've done so, and we bring other investors into our deals as well. A few questions to ask yourself:

1. What is each person's contributions to the partnership? What do they bring to the table? Money, expertise, a good W2 etc. 

2. What does each person deserve as compensation for that contribution? If you have someone as a joint borrower on your loans because of their W2, but put no money into the deal or do anything else, how much is it worth (it's definitely valuable, how valuable is for you to decide)? What if they are putting in money, or bringing other expertise?

3. Can you trust this person? Tough one when money is involved.

4. Make sure everything is written out on paper, and ideally, review by a lawyer. 

Good luck!