Opinions on a rental partnership

[Brian Wobbe]

I would like to hear some opinions on partnership agreements from some BP veterans that you have used. Or what agreement you would consider. Two people would like to purchase a rental house. Person A will deal with tenets, renovations and maintenance. Person B will be bringing the money, and would help with renovations and maintenance. I would like to here from people on both sides of the coin. Issues like.... 
How is the income split. 
Who's name goes on the property. 
Who pays for taxes, insurance, maintenance. 
Exit clauses if someone wants out. 
Differences if the house is bought cash or financed. Any information a newbie might need to consider before I jump in would be appreciated.

[Chris Webb]

I think using a partnership to get started is a great idea. For me, the partnership made it real and took away the excuses I kept giving myself to start my first deal. Once I agreed on a partnership(partner was also a first time investor) I found that we both pushed each other to do what was needed in a quicker time to get our first 2 deals done. 

I don't think the inevitability of a disagreement is enough to outweigh the pros of partnership. I have already disagreed on some small things in my partnership and I wouldn't doubt at some time we will disagree with bigger issues. However, a disagreement or a partner's decision to change direction can be handled when it comes. It won't erase the profits or knowledge gained. I would much rather spread the risk and have another brain looking at what I am doing than just mine. 

We put both our names on the title just in case. We made a business plan together to make sure our short and long term goal were aligned. We have not talked to a lawyer yet about our partnership agreement but hopefully by the end of the year we will. For a long term partnership I think a 50-50 split on income and responsibilities would be best. Our exit clause states that the remaining partner has 5 years to buy out the leaving partner by paying them 50% appraised value of assets. If they can't get the cash for this we would need to sell properties till we had enough to buy them out.