Thoughts on using a partner (not a money partner) - Posted by chris-OH

Posted by John Corey on April 23, 2006 at 24:10:22:


For legal advice you need to speak with a lawyer. Or go to the legal forum.

  1. Can someone who is not an owner work on the property with out a license? States vary on this. What are the rules for OH?

  2. Do not do this as a favor as that muddies the waters. A partnership where both put something in (time, skills, what ever) is fine.

Barney Zick was fond of using options. You could buy the place and get the financing. You can hire the other guy’s crew and you can offer the guy an option. He needs to pay something as consideration. It will cloud the title in that you can not do much without his approval.

It bothers me that there is not a clear reason to partner. Then again a deal where you do not need a partner is a great deal to test a partner out to see if it will work. Then later when something more difficult comes up you know what works and what does not.

Decide why you want to do this together and then come up with a simple and clean way to meet that goal.

John Corey

Thoughts on using a partner (not a money partner) - Posted by chris-OH

Posted by chris-OH on April 22, 2006 at 22:30:16:

I’m interested in hearing some comments, hopefully by John Corey on the legal aspects of this. If others have experience working with a partner, I’d like to hear from you as well.

I have a friend who is a fairly experienced investor. He actually helped motivate me into investing last year. We talk often & several weeks ago he found a great opportunity, a duplex which requires $40K worth of rehab work, but the payoff at the end is tremendous. He ran the #'s & believed this property would be a good bargain at $49K. He could not jump on it due to having so much cash tied up in other properties so he called me about it to see if I wanted it. I checked it out, negotiated my own deal with the seller & put the home in contract for $39K, a full $10K less than what he said would be a bargain. This is all with the blessing of my friend…he couldn’t do it, so he wanted me to.
Here comes the question…I want to get him involved in some fashion. I feel I owe it to him. We’re good friends & we don’t want to hate each other after this. We both have our own set of skills with regards to rehabbing. He has a fully skilled crew available, knows the art of rehabbing on a strict budget, meeting timelines, etc. I have the home in contract & access to full financing. In what way could we structure a partnership to enable him to enjoy a piece fo this action? I’m looking for any & all suggestions-I won’t rule any out.

be careful - Posted by TK

Posted by TK on May 01, 2006 at 14:26:42:

Where friends & money mix; you soon will have neither. Look out for yourself because nobody else will and when you find that gem deal realize that they are few and far between so don’t go givin it all away. Pay your buddy for hours worked on the job and maybe give him a cut (10%) of the profit. He couldn’t do the deal on his own or he would have and you’d of got nothing so throw him a bone certainly - maybe toss in dinner somewhere nice if/when you give him his cut.

Re: Thoughts on using a partner - Posted by dutch

Posted by dutch on April 23, 2006 at 10:18:20:

Pay him a referral fee, or finders fee. Anything from $500 to 1-3% is usually about right, but let your conscience be your guide. I ALWAYS do it when I get turned on to a good deal, even if not asked. I now get more deals from friends and other investors than I do from my own marketing.