Posted by sandyjeans on October 27, 2005 at 12:35:28:
I’d like more details on setting up a partnership like this, too.
I have someone with pretty good credit & great income who has committed to investing $150-200K for downpayments/fixup/business expenses/etc and do any qualifying needed on properties in return for a “decent return” on his money. He is tired of watching his IRA & 401 go down in value while the 2 houses he owns are increasing wildly (Phx area). He’d love to reap more of the appreciation here but has absolutely no time to devote to finding/fixing/managing due to 60+ hours/week in his profession. On the other hand, I have time & knowledge but no money & only fair credit. So it’s a good match, but we want to be sure to legally structure this so we both get what we want & still come out friends! LOL! We plan to reinvest the majority of the profits in the business and then dissolve the partnership in 3 years at which point I should have $$ & credit enough to continue on my own.
We set up an LLC already, but from all I’ve been told since then, that’s good for Holds, but tax-wise, Flips are better bought in an S-Corp, so that’s my job today.
I also need to learn how to find Private Investors for loaning 2nds up to 90%LTV–otherwise we’ll run out of capital too fast. Finding properties doesn’t seem to be a problem for me!