Posted by Irwin on March 23, 1999 at 22:14:50:
You should try to fix the value of her equity now, to be paid for later. Plus, usually when a partner pulls out before the “end” of the project, they cannot expect to receive the full value of their partnership interest. In other words, you can’t just opt out at any time and force your partner to come up with the money to pay you off. On the other hand, you don’t want to share future appreciation with her, so you need a deed which terminates her interest. She’s entitled to a second trust deed for the amount she has coming, with nominal interest, payable upon re-financing or sale of the property. But, if she’s willing to take an unsecured note, then she’s being very fair to you. These are always difficult situations to resolve, but it sounds like maybe you don’t have a problem working with her.