Partnership with Foreign Investor Advice

[Bill Y.]

Hello fellow BP community,

I recently came across an opportunity to potentially partner with a foreign investor to purchase rental properties in the US. As I started doing more research on business entities and lending practices pertaining to foreign investor, I came across the BP community which I have to say is one of the most informative sites around and I wanted to give a big thanks for those who had replied to previous posts similar to my current topic - I've learned a great deal since.

I'm currently looking to purchase SFR rental properties in the Houston area with a foreign partner (close friend of mine) who is willing to invest in downpayment while I obtain a mortgage from a US lender and run the business on the ground locally. Below are my questions which I'd love to hear any advice/feedback from fellow BPers:

1.) What are my lending options assuming the funds are foreign sourced? I've read online a lot of challenges regarding obtaining loans for foreign buyers and I'm curious to hear what other's thoughts/experiences are.
2.) This is probably a CPA/Tax professional question - which form of business entity should I pursue to minimize taxation for foreign investors and for myself? 
3.) What is a typical and fair compensation/ownership structure? Assuming I manage everything on the ground and carry risk of mortgage?

[Cody L.]

The worst decision I've EVER made in my investing life was to partner with a person from out of the US.  He origionally reached me trying to buy one of my properties.  But my property was in a hot area of Houston, thus a crappy return.  He said he wanted a higher return.  I told him that requires going to a worse area, which I don't suggest to people not local.  He asked if I'd want to partner on one.  I said "sure".  I found the deal, got the financing, he pitched in 1/2 the down payment and we went 50/50 on it.

Trouble started when he'd try to micromanage how I operated. I ran it just like I would any of mine.  He wanted reports and called every day to have me justify why I was doing whatever.  I finally said enough.  Things got ugly.  Lawsuits, etc.  I finally bought him out.  Gave him all his $ plus a nice chunk just to get rid of him.

Yeah man.  never again.  If I was to EVER meet someone that wanted to partner, I'd tell them I'd happily take their $ to invest and give them a debt return.  And maybe some upside bump on a sale.  But NEVER EVER EVER an equity position.