Seeking advice on buying a property for an unmarried couple

[Dennis Cobos]

Hello all!

My girlfriend and I are planning on partnering to buy our first investment property in the Sacramento area in California. We understand the risks that there are in buying a property together since we are not married, and we understand that we need to protect ourselves financially in the eventuality that our relationship ends after we buy the property. We want to get together with a lawyer to create a contract for our partnership, so questions that I have for this are:

• What type of lawyer should we look for to help us create this contract? Real Estate Lawyer? Family Lawyer? Etc?
• Does anyone know of a Lawyer that could help guide us in this in the Sacramento area or East Bay of the SF Bay Area?
• Does it make sense to form an LLC or any other type of entity?
• Anything else related to partnerships that I should be aware of or need to educate myself in more?

My girlfriend found an article called “Homebuying tips for unmarried couples” that discusses some dos and don’ts about this, and I think it makes some valuable points. But I wanted to get some feedback from people who might have been through this situation or know someone who has.

Here is the article: http://www.bankrate.com/finance/real-estate/homebuying-tips-unmarried-couples.aspx

Thank you for any feedback!

[Naseer Khan]

@Dennis Cobos 

The previous poster offered some good advice - you are now entering into a business relationship that will likely last for a long time so make sure this is the person you want to do business with. Nevertheless, investing in real estate can be an exciting undertaking, and I wish you the best of luck. 

Regarding your questions:

1) A real estate lawyer will be best to talk to in this situation since you are dealing with title, property vesting and contracts. 

2) I can offer you some guidance in this area - feel free to reach out 

3) I am fan of having an LLC for real estate investing; however, if you only have one smaller property with a loan on it and you dont have significant personal assets to protect, then it may not be necessary. There are many factors to consider but an LLC does separate your personal assets from your business, creating a layer of protection. If you decide to forego the LLC, you can hold the property as tenants in common, where each of you own an interest in the property based on your contribution - you will need a separate agreement for this.

4) If you form a partnership, it is a very good idea to have a partnership agreement before you buy anything and make sure you keep accurate records of your business activities for your taxes, and your capital accounts. 

This response neither constitutes legal or tax advice nor establishes an attorney-client relationship. Inquirers must seek the advice of their own legal counsel prior to undertaking any course of action related to this inquiry.