All Forum Posts by: Christopher Tritch

@Michael Plaks

Thanks for the input Michael. 

Just to provide more information, I think you might say they are sharing in the losses. We agreed that we will split the profits. But, if there's a loss, I'm not indebted to them. Basically, we agreed that if there's a loss, I'll pay them back as much of what they gave me as remains, and nothing more. So, perhaps you would say they're a partner, rather than a lender? 

Also, could you explain why it would be better for them to be a lender? 

Great, thanks for the responses! Glad to hear I won’t be paying extra taxes. 

I'm just beginning my real estate career. After hearing my plans, an acquaintance gave me money under the condition that we would split the profits. This money is now in my LLC's bank account.

Does the IRS consider this income? Do I have to pay taxes on this money? 

Hi,

I'm looking for advice on structuring a financial arrangement with another person.

I was discussing a potential real estate venture with someone I know. I guess I was persuasive because, without me asking, they insisted on giving me money. I was not expecting this and I am not well versed on structuring partnerships. I would appreciate advice on how exactly to put this partnership together. 

This is a flip that would be partially sold with seller financing. With my partner's money, we would pay cash. My hope is to sell the note and recoup the money immediately. But, if I can't, then we would start making a profit after a year or two. My partner needs to recoup any money they put in. We would then split the profits 50/50. My partner understands that there is risk involved. If, for example, the house burns down, they agree that their money would simply be lost. I would not owe them anything. 

The simplest method I can imagine is for all of the monthly payments to go to my partner until they've broken even. After that, the payments could be split between the two of us.

Though...ideally, I'd like to start making some money immediately. What do other investors do? When investment companies take money from private investors, how do they do things? If you were in my shoes, what would you do? 

Also, I suppose this type of contract should be approved by a lawyer. Are there templates online that would allow me to put something together, which I could then present to a lawyer? 

@Ned Carey Thanks! 

@Dan Barli I have not, I will definitely try that. 

Hi,

I'm looking for a real estate attorney in Maryland. Would anyone be able to give me a recommendation? Experience with mobile homes would be a plus. 

Thanks!