Posted by Joseph Zimny on July 25, 2003 at 04:25:11:
Panos,
As with any business relationship, the fundamental element of trust must exist between you and your new ‘partner’.
First, when establishing any new business relationship, I always find it helpful put down on paper my expectations and ask my partner to do the same. Although it may not be a binding contract, it helps each party focus on their responsibilities when crunch time arrives.
Second, you must always maintain a bit of leverage over any deal and direct communication with the seller.
In most cases, doing a deal requires the participation of many different entities (title company, banker, appriaser, etc.) so that it can be difficult to do a crafty, sneaky deal without the word eventually getting out into the marketplace. Eventually, a buyer must register the transaction at the courthouse and then it becomes public record. The moment you find your partner go behind your back, stop doing business with him.
Working with another investor - Posted by Panos A. (NY)
Posted by Panos A. (NY) on July 25, 2003 at 03:59:19:
Hi. I called a REInvestor the other day. I asked him if he would be interested in working together provided that I went out there and found the deals. He said yes, he was interested in that. When I told my friend about this he said. “Well, how would you know if he closed the deal or not? He could tell you that the deal didn’t go through.”
How does this work out? How should I work with him?
Or am I just being paranoid? I mean I don’t know the guy, he can be a really nice person or he can be a not such a nice person. I am a little lost here, any input would be very helpful.
Thank you.
Panos A. (NY)
(1) You could get a deal under contract and assign it your ‘partner’. Establish a good rapport with your seller and keep in contact with him/her to keep abreast of the deal’s status.
(2) Form a new company with both you and your partner as principals. Purchase properties in the name of this new company. An attorney should handle this as well as the formation of any by-laws (for corporations) or operational agreements (for LLC’s).