All Forum Posts by: Ian Focht

Hello!

I am in search of advice from someone who has a business partner. I need advice on structuring the partnership and ensuring that all investments are handled fairly and equally.

Currently we are thinking about treating each investment as an individual contract between partners but are trying to identify ways that we can bring the properties together in a true partnership. Is it possible to list both partners when buying a property with a mortgage? Is it better to go in individually on the loan with a contract to each other?

Essentially, one of us has the seed money the other has all the tools and contacts to rehab, repair, etc. We want it to be a fair and equitable partnership and need some guidance as to what is the industry standard or options in a situation like this.

Our Ideal investment would be as follows (for context)

Find an ideal investment

Partner A & B both review and agree on investment

Partner A or b or A and B apply for mortgage on investment (please advise on this)

Partner A supplies down payment on investment

Partner B supplies all labor and materials to repair, rehab. (depending on extent, partner A may need to help fund)

After 12-18 months re-finance property to pull equity and 1. Repay down money to A? or 2. Repay investment of B and Down Payment of A? or Roll equity into next deal as time and financial investment was equal on both sides?

How can you ensure (in a contract) that both parties receive equitable stake in the property? What is fair? What else should be considered?

IF an A+B loan is obtained, are you limited to 10 properties or since there are 2 investors would that limit be 20 for standard loans?

Is there a way to ensure equal risk to both parties as well as an escape clause in the situation where the other partner abandons the partnership as far as management and costs go? Obviously these all all things we will discuss and agree on but we need to make sure we are considering all factors when drawing up  our agreements or structuring our business.

Is it even a possibility to start an LLC and obtain a mortgage without them calling it due when its transferred? I feel like this would be the best way to share responsibility and grow but want to get the opinion of others with more knowledge to help explore options and possibilities.

Is it ultimately a better structure to be "partners" but individually conduct investments with the assistance of one another?

Thank you all so much for the advice and support.

Ian

Good evening everyone!

I’m new to investing and I’m a person who likes to put together a long term roadmap when I get into something. One thing that I’m having trouble understanding is: How do you continue to acquire properties after you reach the bank limits on mortgages? I have a source of private lending to place down payments on homes that I would intend on refinancing and repaying within 12-18 months. That private source of down money would be accessible for me as long as things go smoothly. I would not be able to mortgage through this source so once I reach 10 mortgages that would be my limit. Unless I misunderstand how it evolves at that point. 

Can anyone explain briefly how one can expand beyond that 10 mortgage limit to reach goals such as 50-100 doors without giving up any of the single family homes already invested in? 

Cash flow is important but I’m aiming 10 years from now as my maturity date for the homes due to loan pay down. At that point my aim is to convert into large multi-family.

Any advice relating to getting a general roadmap together would be happily received. This form of investing really makes sense to me and I am in love with the process.  Can’t wait to get started and I’m very thankful to be part of this group.

Thanks!

Ian