Posted by Brent_IL on February 07, 2002 at 17:05:26:
This relationship is only in the longing-glances-across-the-room stage. No partnership, yet.
You don?t have anything to show him at this time. If you want to lock down your partner, enter into a joint venture, or simply send him a letter-of-intent outlining your approach and ask for his agreement. Have him deposit the money in a joint bank account needing two signatures. Don?t sign generic partnership papers at the bank just to open an account.
Remember always, he may have the money, but he is looking for you to be the expert. Without you all he has is a pile of money that may be shrinking in amount and purchasing power every single day. That said, you need to specialize in order to have an area of expertise.
The ways to make money in CRE are myriad, and a CREer with experience, money, and courage can sometimes force a good deal where there is none. But, not all of the time.
At this relatively early level of experience, if I were you, I?d be looking for an area of investment that I felt comfortable with, and that I could get into and out-of quickly. If you can bring your investor a deal that doesn?t tie up his money for long and shows a modest profit, he will be anxious to reinvest. Tax advantages to the investor are a bonus.
Make an elaborate list of the duties and functions you will be performing for the partnership. His list consists of deposit money in escrow; get profit check. Email both lists. Also include a budget for adverising expenses intended to bring motivated sellers to you.