Real Estate Partnership Agreement Structure Recommendations

[Randy Stuart]

I am interested in entering into a partnership with a friend to purchase real estate for long term land lording. Partner #1 will be the financier and provide the funds to purchase and will handle the tenant payments, while partner #2 will manage the rehab of the property and ongoing maintenance. Essentially partner #2 is the GC for the rehab and will handle ongoing service needs after rehab.

What are some ways that these types of partnerships are handled? Both partners are seeking an equity share in the property. Our desire is that this agreement is fair and beneficial for both partners. What are your thoughts on how this agreement should be structured?

The first property we are looking to partner on is a 1920’s 4-plex that needs a lot of work. Ideally this partnership would repeat over and over adding more properties and benefiting both partners.

I would love to hear any advice or experiences you have had with similar types of partnerships. Thanks in advance!