Partnerships for Financing

Partnerships for Financing

Tim AdamsPro Member
Saint Joseph, MI · Member since 2019 · 6 posts · 5 votes

Hello everyone, I have a question for the group regarding partnerships on real estate deals that are contributing financially to the purchase of a property. If I am buying a property and using a partnership to cover 50% or even up to 100% of the down payment how do you normally navigate the property titling? If you are using a partnership do both parties (myself and my $$ contributer) have their name of the property of just me? I feel like I would be more comfortable keeping just myself on the loan/mortgage and title and drawing up a contract outside of the home purchase that specifies our terms of the purchase, money contributed and financial split moving forward with cash flow and if the home is sold. Is this something done normally or is it necessary to list the partner when buying a property? I just want to make sure that I do what I am supposed to "legally and technically" but want to keep myself and partner protected should something happen in the future. Thanks for your help and advise in advance, any input will help. Personal examples would be great if you've been in this situation  as well. Thanks!

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    3y

    @Tim Adams you buy the property in the partnership name.  That's how you do it.  So if you create a partnership...well, a TRUE partnership...you create an entity.  That entity then outlines how partnership is granted, who get's what responsibilities, and who gets what % of INCOME.  That % amount is how you will file your taxes later.  I mean, I guess you could do this without creating a true partnership...but it gets messy as you can see.  Creating a partnership keeps it simple for all parties involved.

    Hope all of that makes sense.

  • Lender · Fort Lauderdale, FL (Lending in FL CT GA MI PA) · Member since 2022 · 470 posts · 349 votes
    3y

    Andrew nailed it. Create an entity (usually an LLC) and outline everything in the partnership agreement.

  • Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Create a LLC together

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