Structuring a partnership on a STR property on Maui

[Jeff Graves]

My wife and I currently own a vacation rental on Maui, in the Kihei area. We have recently relocated to the Fort Worth area in Texas to be close to our grandson (15 months), daughter, and son-in-law.  We are thinking about inviting a partner to have a 50% ownership interest, any ideas on how best to do that so we can pull some of the equity out, and not trigger a due on sales clause?

Our condo has performed well in the past and we do self-manage the bookings.

Thanks.

Jeff

[Andy Thoms]

Hi Jeff, you would want to create an LLC, put the asset in the LLC. Determine the price for the 50% share then define the terms, conditions, splits, equitable usage plan, renting rules, furniture plan, capital contribution terms, and exit plan in the operating agreement. You would definetely want to use an attorney experienced in real estate partnership structures or fractional ownership structures who could easily walk you through the structure. I have an attorney who could assist you with this kind of structure if you need one. But you may want to use a HI attorney.