Replies (9)
- Philip Sencer, "Philip_Chicago"
- Contributions:833
If you cannot agree on simple things like this maybe you should not invest with partners. Are all the partners equal...all putinmg the same $$ down, all receiving the same % profit? If so them perhaps all utilities/taxes etc should be split equally. If not then perhaps base it on some other %.
- Flavio Tejada, "$Discount Broker$"
- Contributions:36
it is all negotiable between the partners and your agreement should be in writing...for example, if one partner is putting in more money the other can put in more labor...you can do it yourself or have a professional do it...
good luck
- Matt Laricy, "Matt Laricy"
- Contributions:1995
- Susanna Haynie, "Susanna Haynie"
- Contributions:7
Have a business plan, a business agreement.
- Evelyn S. Fred, "Evelyn S. Fred"
- Contributions:213
Spell out who will pay the mortgage, timing, amount, who pays the assessments, timing, amount, if one is living there while the unit gets "flipped' then what do you each expect of the other, etc... Be as concise as possible.
Rules are whatever you mutually agree to upfront. Make sure your agreement is documented & given the "seal of approval" by an attorney.
Good luck!
- sunnyview
- Contributions:26916
Get a good attorney to spell out EVERYTHING or you are walking into trouble. Remember, if you bought and rented out this property you would have income coming in so the occupying partner should be compensating you for the 50% lost rent while they live there. Expenses and profits shold be split 50/50 with an agreement included on how to terminate the agreement and value the property upon the dissolution of the partnership. Spell it out now.
- Ofe Polack, "Ofe Polack"
- Contributions:3408
- Maria Avellaneda, "MAvellaneda"
- Contributions:510
- Barbie Oehlschlager, "Barbie Oehlschlager"
- Contributions:37
With your question it seems like there have been many responses for "get legal advice" and "put it in writing." Let's assume that you're intellegent enough to do things the right way in that arena.
For example, I trust my brother completely. If I were to be in a situation were we both placed 15k down and he lived in the condo for a few months there would be a 2 things might suggest when structuring the flip.
Split the cost of everything and the profit at a pre-determined ratio. 50/50, 60/40, 72/28, whatever we choose.
1)If the condo fee includes great amenities that he is using instead of paying out of pocket (gym, pool, internet, clubhouse living room), I would ask that he cover slightly more of the condo fee or buy me lunch more frequently, but I wouldn't expect him to pay for the whole amount.
2) Pre-determine what the rent would be for the unit before remodel. Monthly collect the rent and place it in an escow account. Upon sale treat that rent collected as profit.
Also, evaluate the business and personal relationship you have with your partner. What is the potential that they will do more business with you in the future? Regardless of what you decide just remember that it's important for you and your partner to feel like you are both benefiting from the arrangement and doing the right thing. The stress of a broken relationship wth someone important is usually more long lasting and stressful than a bad investment.
Who pays what when investing in a condo with a partner and one partner lives there?
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