Goals
Today I want to talk about partnerships. I’ve actually had two members come in today and ask the same question- “How do you do this?” The first person called in and said “I’m looking to create a partnership, how do I structure it?” The honest answer to that is that there are a million ways to structure your partnership- you can structure it however you want to.
I recommend that you sit down with an attorney and structure it within the legal limits of the law and where everyone is on the same page as to what the partnership is. Have it drawn up so everyone understands it and it’s on paper. So that’s really the first step- figure out what you want to achieve with your partner, what you’re going to do, and what the goals of that company are.
Deals
The second question is, “Ok, I have a partnership but how do I structure a deal?” There’s several ways to do that as well. One way is for one partner to be the lender. We look at all our private lenders as partners in our deals because not only do they get an interest check but they also receive a portion of the equity in the property.
Another way is to have both of you be on title. So your company and their company both go on title for the property and both have a piece of ownership, and you share all the responsibilities with the loan.
There’s other ways where one can be an elite and one can be a passive. That way one person may be doing all the work- finding the property and rehabbing the property and managing it, and the other is just financing the deal.
So there’s several ways to do every partnership. The key is to sit down, structure it and write down what you want to achieve in the partnership and move on from there. So day one, start figuring out what you want and go for it.
