Partnership questions

I have a question regarding partnerships. I have two friends that are interested in REI. But I’d like to ask myself and them some questions to consider when forming a partnership. So far these are the questions I have came up with.

Why are you interested in Real Estate Investing?

What are your short term and long term goals?

What do you, personally, bring to the business?

Leadership: Who is the leader and why? Should there be a leader?

Exit: What happens when someone wants to leave the partnership? Remember, we will be earning monthly cash flow from the properties we buy for 30 years or more.

What resources do you have that will help us succeed?

Analyze this deal: We find a house that is asking $70K, the FMV is $100K, there are no repairs to be made and it rents out for $800 a month, the monthly mortgage payment is $300, is this a good deal? Why or why not?

What are some other questions that need to be asked?


There should be a leader and a way to remove the leader if need be. This should all be outlined in the partnership contract.

Is the analyze this deal question something you would ask your partners? If so, why? Who cares how much they know, you just need their money/resources to allow you to do bigger deals that you couldn’t otherwise do. Heck for me I’d prefer someone that was a silent partner. Send me a check, I’ll send you a monthly progress report and check…the end.

who’s putting in what.
who’s taking what risk.
who’s taking what out.
what’s the exit strategy.

everything’s in writing. if it’s not in writing, it doesn’t exist. “handshake” deals between friends usually end up in either a bad deal or a bad friendship.