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Updated over 1 year ago on . Most recent reply

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16
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Jonathan Ruths
  • Springfield, PA
6
Votes |
16
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Structuring a partnership deal

Jonathan Ruths
  • Springfield, PA
Posted

Hi all,

Just curious on how you'd structure a deal with a partner with the following information. I'm going to bring about 30k to put towards downpayment and closing costs of the purchase and the property will be in my name as a second home.  My partner will bring about 50k for rehab and furnishing.

Here's what I'm thinking. Since I'm managing the property, I'll take 15% off the top of all bookings similar to a management company.  Then my partner and I will split the remaining profits based on the percentage of the money we brought.

Does that sound like a good deal for everyone?  Thanks for your feedback!

Most Popular Reply

User Stats

16
Posts
6
Votes
Jonathan Ruths
  • Springfield, PA
6
Votes |
16
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Jonathan Ruths
  • Springfield, PA
Replied
Quote from @Nathan Gesner:
Quote from @Jonathan Ruths:


Consult an attorney for development. Partners should consider if they plan to hold the property forever, or for a set period of time. I personally recommend a short term, like 3-5 years, where partners are required to review performance and vote to keep the property or sell and split. This gives everyone a way out.

What if one partner wants to cash out because they need the money? Allow them a way to sell their share to the other partner(s). This allows them to leave without requiring the other partner(s) to sell a deal that's performing well. What if the partner(s) can't buy the other out? Can they sell it to another person and bring them in as a partner? Do the remaining partners get to vote and approve/deny the new member?

That's just a few sips to wet your whistle. It's a lot to think about.

Yeah, definitely a lot to think about.  Thanks!

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