What else should I do to protect myself in flip partnership?

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Did you have an attorney create the agreement? Does the agreement discuss all the edge-case situations, like if one party dies, if one party declares bankruptcy, if the project loses money, if the parties disagree on something like listing price or sale price, what happens if one party walks away, etc.?Sounds to me like you were very trusting with these people you don't know very well -- at this point, you can just hope that they do what they say they will or you can try to fix the situation by asking them to sign a more formal agreement that you have an attorney create for you.Personally, I wouldn't just trust that they'll do the right thing...unless you don't care if you lose your money...

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Did you ask for your name to be on the title or LLC and they said no, or did it not come up? You purchased the property with your funds correct? If so, how would they argue not having your name on the ownership papers.I have never done something like this, but I would want to create an LLC that owns the property, and both are partners in the LLC. If you invested the money in to buying the house, at this point you are the full owner, as your partner has invested $0, correct?

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The biggest drawback is not being on title or owning shares and voting rights for the LLC.legal agreements are basically useless because the cost of ligation is excessive

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Thanks for all the input guys, I contacted an attorney and he's writing up a promissory note along with an affidavit for the property. To my understanding this way I have lawyer written documents that I can use in court and they cannot sell the property without my knowledge

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@Michael Nieves worse case scenario you call up an attorney, explain your story, and pay for his advise and skill. Your attorney may advise to place some kind of equitable interest lien on the property. I hope you have some kind of paper trial for him to work off of.Best of luck!

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Do the real estate agents own other properties in their LLC? I am assuming so. Ask them to explain how having it in the LLC is a tax benefit for the property. Most LLC (that are not S-corp) I believe are flow through entities for tax purposes. Owning properties in them is more for limiting the liabilities of the members so that if they go bankrupt, the courts/bank can't come after your other assets. I would ask to see the operating agreement and financials of the LLC that owns the property. That should give you a better idea what you are in for. I think the title companies would ask for operating agreement before closing to make sure that the signers are legally allowed to sign, so they should be readily available. setting up an operating agreement is expensive but try to set it up with a formula you can use again to echo the above comments. Also it worries me in this situation that they may not be incentivized to be thorough on the rehab. The less the "other" partners spend on the fix up, maybe the better their ROI, which may be contradictory to your return... all the fine details to be ironed out in pro forma/budget. They spend X on rehab, their brokerage services are worth X. Projected sale/rent, projected ROI, etc.

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Good call, I contacted the lawyer Dane suggested and are currently working something out, I'm sure my partners are good people but better safe than sorry. We're running into an issue with agreeing on titling, I've been told adding my own name to the title then defeats the tax benefits of an LLC

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Promissory notes are pretty much "fill in the blank" for most attorneys -- a title company will generally provide this to you for free (along with a deed of trust or mortgage) if you're closing the deal with them.JV agreements are going to be much more specific to the deal/relationship, and can be quite complicated when you factor in the edge cases (what happens if someone dies, what happens if someone walks away, etc). These types of agreements aren't necessary when things go well; they are generally only important when you run into a major issue. And "fill in the blank" won't cut it for major issues.$2K may be a reasonable investment if you can use the agreement for future relationships as well...

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It shouldn't cost that much to draw up an agreement. Pm me and I can send you contact Info for my real estate attorney. I just had him draw up a promissory note for a house that we had another investor put in 50k towards renovations.

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Good points! I contacted a lawyer and they quoted me over 2k to write up a joint venture agreement, which seems a bit steep. Do you have any recommendations on legal entities in the DFW area?