All Forum Posts by: Matthew Reid

My buddy and I want to start buying some rental properties and he wants it to be a 50/50 partnership. He has all the money and I have the area expertise along with many contacts. His proposal sounds okay to me but I'm wondering what the BP community thinks.

EX: The property cost 139K and needs 41K in repairs. My partner will put up the cash; 90K for him and he'll loan me 90K at 6%. He says that I can pay interest only until I can pay the principle, which without a term I'm not really sure how it would work. We'd obviously have to iron that out.

I would be in charge of all maintence and he would be in charge of finding the renters. We would hire an accountant, etc. We're thinking this will be a vaction rental. It should have a NOI of about $23,800.

Please weigh in and let me know your thoughts on the basic structure of the partnership. I'm happy to answer all questions. Thanks BP!

Matt

Welcome Samuel! This is a great site that you will get a wealth of knowledge from. If you find any deals, I'm in Kennebunk and would love to talk about them. Looks like there's some good Maine people on here so maybe we can all network and help each other out. Enjoy the site!

Thanks for the insight, I feel the same way. I just wanted to see if anyone had a creative way to solve that sort of partnership. I'll be keeping the money guy just that, the money guy. Again, thanks for all the opinions.

Hello BP,

I was hoping to get some thoughts on how to structure a three way partnership that would look something like this. We are going to be buying multi-families that are in need of updating and the current rents are below market.

Myself- I would find the deals and help my construction partner upgrade the units. I would put half the upgrade costs in, my construction partner would put in the other half. I would also deal with the tenants.

My Construction Partner- He would do all the upgrading and manual labor that would need to be done. He would also plow, yard work, etc. He would put in half the upgrade costs. His labor would be "free".

Money Partner- I have a money partner that would like to feel a part of the action. He doesn't want to just be a private lender, he wants a say. I don't mind this because he's a great guy and he has deep pockets. He would put the principle amount in and my construction partner and I would pay for the repairs/upgrades.

I guess my I'm wondering what percentages would be far for each partner? For arguments sake we'll say we can't get private money without the lender having some sort of say. What kind of other role can my lender partner play so he feels part of it? Is this just to many cooks in the kitchen?

Thanks for any partnership info you can give.

I'm trying to come up with a Marketing Plan/Budget as a new Realtor and I'm wondering what the profesional opinion is. I've heard that a Realtor should spend 10% of their income, do you find this to be true? How much do you spend on each listing vs what you spend to Market yourself? Can you break down what you spend and what you spend it on? Annually, monthly, weekly, etc. What has had the best returns and why do you think the return is so good. Thanks for your opinion.

@Joe Gore. ?I'm hoping she will do owner financing with little money down or I have a private source I could ask and then refinance later.

I thought I posted this with spaces? Sorry.

Since I’m at the beginning of this potential deal I’m going to make this a multi entry story… About two months ago I decided that I would send five letters to absentee owners with no/low mortgages of multi units in my town. I went through my Assessors website and got five properties that fit my criteria. I hand wrote the letters on yellow paper basically stating that I was a lifelong Kennebunk resident and my wife and I were looking to buy properties in the area. I may have gotten ahead of myself since I had no “real” money and no clear direction, but I was excited. I received one reply within a week but out of pure fear I didn’t call them back. I talked myself out of the deal by telling myself that the property really wasn’t in the exact location that I wanted, that the owners would probably ask too much for it, and I wasn’t really ready. I can’t remember all my reasoning but I was able to talk myself out of it pretty quick. What a fool! Two months went by and I received a text from a property owner that just got back into town (California). The text went onto explain that she was very sorry for getting back to me so late and she would love to talk. This text was at 10:30pm my time so I received it in the morning. Now I’ve gotten two replies out of five letters, wow. I went to work and was planning on calling her back when I got home; of course I was trying to get my courage up all day. Half way through the day I checked my phone and realized I had a message from the property owner. She told me again how sorry she was that she’d kept me waiting for so long and that she hasn’t thought about selling it until she got my letter. She said the house has been good to her but since she moved 3,000 miles away 10 years ago she doesn’t think she’ll be returning. She hasn’t been to the property in about three years. I knew after listening to the message that I better suck it up and give her a call. I called her back and was completely honest with her. I told her why I wrote the letter, why I like the property, and that I really had no idea what I was doing. Well it seemed to go smooth, she gave me the number of one of the tenants and told me she would call him and let him know that I would be calling. 15 minutes later she called me back and told me the tenant would be expecting my call. I’m planning on visiting the property sometime next with a contractor friend of mine. I don’t know much about the property except for a few things that I’ll list below. The property is a two unit and the rents are $900 each with the tenants paying all utilities. Taxes are $2300 Owner pays an impact fee of $68 every three months, so I could hookup public water/sewer. She’s owed the house for 25 years. It’s always rented well and one tenant has been there 15 years. It looks like the property could use a little work from the outside and when she bought the property 25 years ago she had a structural engineer come take a look at the foundation that was buckling. The engineer told he that she shouldn’t mess if it, it would only open a can of worms, she didn’t and it’s been in the same condition ever since. I’ll send an update when I learn more. Thanks for reading, and please post thoughts and replies.

Welcome to BP Kevin! I haven't really been as active as I'd like to be but I'm going to try and get better. I would definitely check out the podcast, it's great.

I live in Kennebunk Maine which is almost directly between Portland and Portsmouth. I'm in the process of selling my rental unit right now and I'd love to reinvest in a few projects. I'm a beginner but maybe we could help each other out and at the very least just chat about the real estate up here. I'd love to have someone in the area to talk to that loves real estate the way I do.

Do you spend much time up in this area?

I'll send you a connect request.

Again, welcome to BP!

Welcome Bernie!
I'm pretty new to this site and I'm learning everyday. I'm in Kennebunk, maybe we can get together and go over ideas? I'm going to be a sit and hold, cash flow investor. I look forward to networking with you.