what to look out for in partnership - Posted by mike

import · September 22, 2003, 2:33pm

Posted by tonyb, columbus, ohio on September 22, 2003 at 19:31:48:

yeah, and what about liability… partner screws up, your on the hook too if it is a true partnership.

import · September 22, 2003, 2:33pm

Posted by mike on September 22, 2003 at 14:33:48:

I would appreciate any advice on setting up a partnership. Both partners are young professionals, who will share the downpayment on a duplex dwelling, which is currently a rental property, and we are looking to continue as such.
We will manage and own the property jointly. We want to make sure that we’ve covered everything legally, and realize that a partnership agreement should be set up by our lawyer.
Any advice / comments / specific concerns would be appreciated

import · September 22, 2003, 9:15pm

Re: what to look out for in partnership - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 22, 2003 at 21:15:58:

Mike------------------

Don’t do a partnership unless you absolutely have to do so to make a deal happen.

If you are going to go ahead with a partnership anyway, write up an extensive partnership agreement. I believe Nolo Press has a book on setting up partnerships.

If you can write up a very complete partnership agreement, it is possible that you will be able to work together in a partnership. If not, good, you found out before you locked yourself into a property with the other person.

Be sure that you are in complete agreement as to the length of time to hold a property and under what circumstances you will sell it. This is the item that most often comes between two partners.

Good InvestingRon Starr*

import · September 22, 2003, 3:16pm

Re: what to look out for in partnership - Posted by Heather -Tx

Posted by Heather -Tx on September 22, 2003 at 15:16:40:

IMHO If you really need a partner, just make it on a case by case basis. You may not need a partner on your next deal… or 3 down the road.
I have successfully partnered 2 deals now with a seasoned investor… but it is just one deal at a time until I have the funds in the bank to do it myself. And he brought all the money, AND the expertise to the deal. I provided the deal and all the legwork during the rehab and so on.
It’s great starting out to partner a deal or even a couple… but the other person needs to have more than just cash, the know how is priceless… cash you can get from many places if your deal is really a deal.

Hope this helps,
Heather

PS I would also STRONGLY Suggest talk to other people that have done business with the person you want to partner with. Other people they have partnered with would be perferable. And CHECK Those references

import · September 22, 2003, 2:56pm

You should look out for…Partners! - Posted by js-Indianapolis

Posted by js-Indianapolis on September 22, 2003 at 14:56:19:

Really. Partnerships are the WORST idea, unless this is the ONLY way to make this work. You aren’t just forming some legal entity that might have some nuances. You’re getting married. Really, a partnership is a lot more like a marriage than a business. Do you want to marry your partner? Sure, in the beginning it looks like it’ll all be roses. Just wait until you get to that point where leaving the toilet seat up is the biggest deal in the world. It can happen.

Bottom line, take on a partner if they bring something to the table that you absolutely cannot. Skills, cash, whatever. But really, cash is cheap at even high interest, VS 50% partners. If this person is a friend, what’s the true cost of this partnership if things go sideways? You’ve got a lifetime commitment in just this one place, unless you specify right now what exactly will happen to it in the next 10-20-30 years.

And in that case, what will happen? What if you want to cash out, and your partner won’t? What if you need the cash NOW, and he wants the cashflow? What if he gets divorced, and you’re now in business 25% with his evil ex-wife? What if, what if, what if…

Really, the only good thing about a partnership is that you can tell everyone it was your partner?s fault when you fail.

import · September 23, 2003, 2:25pm

Re: what to look out for in partnership - Posted by mike

Posted by mike on September 23, 2003 at 14:25:00:

thanks to all for their comments; good insight and confirmation of my feelings on the subject.

I need the partnership, atleast for the first one, and the agreement will cover the details. And you know what, to not proceed and give it our best … , now that’s truly failure.

thanks again

Mike

import · September 22, 2003, 11:03pm

Re: You should look out for…Partners! - Posted by Cork Horner

Posted by Cork Horner on September 22, 2003 at 23:03:33:

Limited Partnerships work.