Newbie Partnership

General Real Estate Investing
1

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

2

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.

http://www.chicagotitle.com//pdfs/8ways.pdf

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

3

Thank you, Graciez