Hello Fellow BP Members,
I am here because I am about to take another large step forward in my REI career and I could use some guidance. I have found myself a business partner to move forward with on B&H properties and we have a meeting set up this Saturday night to begin discussions. Now this partner of mine also happens to be my best friend for the better part of 25 years and I want to try and keep it that way. Where we stand at the moment is he has capital, he is interested in investing, but with his job and family he doesn't have the time. As far as his experience goes he purchased his first house, years later built his second and now primary residence and has been renting out the first residence since using a property management company to do so. My experience has only come from the books I've been reading, the webinars put on by BP, Podcasts I listened to here and things of the sort. No actual hands on or property purchased as of yet. However I am incredibly driven and I have the time that he lacks to acquire and manage these properties if need be.
Now regardless of whether we are friends I am going to assume a contract will be the best way to go to maintain our roles and be held accountable for our part in the business. What is the best way of drawing up a contract? Do we write them ourselves, find a template somewhere, or other? I've heard its good to have an attorney look over them to make sure they are fair to both parties. Do they assist with writing them and should we refer to one or is this something we could come to terms on our own and sign it and be done?
I'm sure we will need to speak with a tax professional about the best way to structure this to benefit the both of us. Do we need an entity to do this as a partnership? Is that something the tax professional will suggest or do we need another party to assist in that decision? As far as purchasing houses goes, does one name or both names go on the property? Should one or both parties apply for mortgages together? Should we have a joint bank account separate from our own strictly for the REI business to keep track of funds and cash flow recycling and etc? I believe this is something that would be in the name of an entity should we start one correct?
Haven't been able to read too much yet on investing in MFH (Aside from "The Book on Rental Property Investing" from BP") and partnerships so I am open to suggestions because I am full of questions. I also plan on attending two REI meetings this month in my area to hopefully network there but I wanted to try to get a handle and direction on this to be more prepared for my meeting on Saturday.
Thank you everyone for your time in advance! I appreciate the willingness of the members of this great community to help those around them grow.
