All Forum Posts by: Account Closed

As we are looking to expand our real estate business, I have obviously been reading and listening to a lot on bigger pockets about partnerships and other people’s money. I have come across a deal in our area for a 4-plex that I have presented to a potential partner who has money and is interested. We currently do not have any liquid assets to provide, but I would be handling all of the day to day management, rehabbing, renting, maintenance etc.

From reading other posts, it seems a typically starting point for negotiating would be a 50/50 split of profits. I’m assuming most people creatively negotiate all other terms as well. however I do have other questions....

How do we structure the partnership? A new LLC? Just a JV agreement? Do we get a mortgage in both names? A title in both names?

I would think we need to talk with a lawyer regarding a lot of this but I’m just trying to get a basic idea of what is common so I can talk to him more intelligently about our options.

Any help or insight is greatly appreciate. Thanks to the community for all the help thus far!

Jason

When I JV with someone, sometimes we set up an LLC with each LLC as 51/49 partners with 50/50 split on profits. Someone has to be able to make decisions, so thusly 51/49 ownership.We have a JV agreement that outlines the general reason and goals as to why we are getting together. Each house then has it's own JV agreement with address, legal description etc and what the details are for that particular house. The Title goes in the name of the LLC. In my case, one of us is the money guy and the other is the "work" guy so there isn't any confusion about making decisions. My partners and I have made a lot of money using this set up. That way they can partner with other people and I can partner with other people without confusing any particular property.

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Originally posted by @Joshua Dean Yancey:

@Account Closed Our goal is to start building some passive income through real estate buying and holding. The first milestone is having enough coming in so that my wife can be a stay at home mom.

@Anthony Dooley We are looking at four properties on Saturday that we can afford and are close enough to us to manage personally for the time being. All of them have been recently rented for fair market rates and more than enough to cover the mortgage, taxes, insurance with some to spare for occupancy and upgrades. Two of them have existing renters which I am looking upon as a positive. One of the properties has a SFH and a MH with the MH rented out for an amount that covers the mortgage on both but not much else.

Thanks to both of you for a quick response. -JY

Blanket isn't a huge town so you will probably be looking where there is more demand. I'm buying in Round Rock and Cedar Park. Killeen is good too. If you are looking for cash flow, and it sounds like you might be, if you buy on Owner Financing or Wraps and Subject To (zero down to low down) the way I do, you can get to your numbers in a year or two. If you go the bank financing route, you will run out of money to put 20% down on houses before you get your cash flow. Most of my purchases cash flow about $500 a month each. If you figure the amount you need for a monthly income and divide by $500, that gives you an idea of the number of properties you need using "Subject To" to buy the properties. Most people say they average $100 to $150 a month using traditional bank loans to buy properties. And then they have a roof to replace or an AC Unit to replace. That eats up all their "profit". So, long term, bank financing works but it is usually a very long term. Time is money. If you can get 'er done in two years, isn't it worth pursuing?

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Originally posted by @Joshua Dean Yancey:

Our house is paid off and we have some cash in hand.

We are looking at local properties in rural texas in a low crime, low unemployment and high growth area.

I'll be honest the length of my experience is being the only person on the lease and making sure my roommates pay their portion of the rent.

I can figure out how to do credit checks and verify references but wouldn't mind some help.

- JDY

I can give you some pointers, what is it that you want to accomplish?

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I see that you are a wholesaler. I've read that Florida prohibits that function unless you are a real estate agent or take ownership. You probably have to address that issue before most people would JV just because of the liability.

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All Forum Posts by: Account Closed

Account Closed has started 54 posts and replied 3295 times.

Post: Looking for an emerging market

Post: 1st potential partnership - basics

Post: Finding the first property

Post: Finding the first property

Post: Is JVing the way? How does one NOT suck at it?