Newbie Partnership

Hi, am considering a partnership with someone I don’t know well. In fact just met with him to look at a 4-plex he has FSBO. I decided it wouldn’t cash flow as well as I think. He has all but one units rented. It is in a college town. It would be a good place to start, as it does cash flow-when it is full. I asked if he had ever considered a partnership on the 4-plex as he is not a good manager and I have the time and some education on this. He said in talking with me he would consider it with me as he feels I know that area quite well and he does not. The building is in quite good shape, built in the 80’s all 2 bdr/1 bth, laundry facilities. The reason he is selling it is that he does not have time to manage it. The reason I would like to partner on it is to learn how to manage/landlord, and get into rental property. Any suggestions on whether it is a good idea to partner on something like this, or should I just see if he would like to pay me to manage and not take the risk of investing at first? Not sure where to start. Graciez

Hi graciez,

There are eight ways to take title, six of them allow for co-ownership:

  1. Community Property;
  2. Joint tenancy;
  3. Tenancy in Common;
  4. Tenancy in Partnership;
  5. Title Holding Trust
  6. Community Property Right of Survivorship.

For an independent analysis, here is a report from Chicago Title Company that should answer many questions. I find it to be very helpful and recommend that you download it to have on hand.

I always use land trusts and that is what I recommend. You will find other recommendations from other knowledgeable people who post on this forum. Best of luck to you.

Da Wiz

Thank you, Graciez