All Forum Posts by: Michael Olson

 Thank you for the advise. I'll talk to my lawyer about the use of a Trust. Unfortunately I don't have the capital to scoff at this opportunity. 

Background: I am an aspiring investor (buy and hold) who has spent the last year studying up, getting my financial affairs in order, and saving capital. I am preparing to start looking for my first serious deal this fall. My long time and trusted friend recently approached me, he has capital he would like to invest and is interested in partnering with me in rentals.

Question: All of my research has been based on the assumption that I would be going this alone. Now my friend wants to form an LLC and go into business together. This is a very exciting development as he brings serious capital to the table and we could start doing deals very quickly, we could be much more aggressive than I could ever be by myself. That said, I don't know how to equitably divide up profits and losses. He would be bringing significantly more capital to the table than I would be, but that's it, I'm doing 100% of the work. I'm finding the deals, overseeing the rehabs, and acting as full time property manager. He already has a full-time job and runs a side business, not to mention he is not local. My question is, what are the best options for structuring this? How do you weigh the additional capital he brings to the table versus the sweat equity I'm contributing. At the end of the day we want this to be a true partnership. Any and all advise is appreciated.

Moved to General Investing. 

@Nathan Brooks Thank you for the advice. I see the wisdom in what you and J are saying.

@J Scott I agree. I intend to sit with this investor and ask if he would be willing to work with me on terms that don't involve quite as substantial an upfront risk for me but still show motivation and commitment on my part. If he is completely unwilling to budge on the large upfront payment it will make me question his motivations.

At a local REIC a local investor made the following offer:

The investor has an extensive and well financed targeted marketing campaign (+15K per month). For a substantial upfront fee (well, substantial to me) the investor will provide you with 100+ leads per month and personally coach you on how to follow up on those leads (what to say, how to say it, etc.). The first three deals you close you keep 100% of the profit. After that it's a 50/50 split for as long as the partnership is mutually agreeable. 

My research shows that the investor has a good reputation in the local community. Given the length of time he's been operating in the local area and his positive reputation I'm prone to believe the numbers he's giving in his pitch. I'm just wondering if anybody has seen this type of offer before and what their thoughts are on it. 

Has anybody attended the Colorado Springs REIC meetings listed on meetup.com? Did you find them to be a productive use of your time? I'm very new to the world of REI and I'd like to maximize the return investment on my time. I don't want to go to the meeting just to find out it's a sales pitch by some local guru or a room full of wannabe wholesalers fighting over two investors. I'm very excited to network with local investors and get involved in the community, I just want to be cautious of scams and wasting my time.

@Louis Radosevich Sorry for the slow reply, I've been traveling on business. I actually joined the CoS Real Estate Investor's Club on meetup about a week ago. I've marked my calendar for the Jan 7th meeting. I'm looking forward to getting to know some folks.

@Kerry Baird @Robert Leonard ,

Appreciate the welcome and the great advice. I've added the books you mentioned to my (already very long) reading list. 

@Angelo Behar @Tyler Flagg 

Thanks for the warm welcome gents. Like I said I'm just looking forward o learning the ropes. I've been burning through the podcast and reading all I can. This forum is a great start.