buying first property with a friend. advice and tips are greatly appreciated.

[AdamB]

Hello everyone, thanks for taking the time to read this. And giving advice to the beginning of a partnership.

A friend and myself are going to be purchasing our first investment property. Advice on legal partnership agreements and any other other information or tips you guys may have to help us develop as investors would be aawesome. Thanks again.

Adam

 

[Thomas Beyer]

What does the other partner bring to the table ? What do you bring to the table ?



Agree upfront on

• who does what kind of work,
• where to buy or how to decide where to buy
• what to buy or how to decide what to buy
• who qualifies for mortgage and compensation for it
• when to decide to exit
  what happens if one party wants out but not the other
  What to do if add'l cash is required
  how to pay the working partner(s) / 3rd party/parties
  how to pay the money partner(s)
  what legal structure to use (LP ? corporation ? trust ? beneficial ownership ? undivided interest ?)

 

[Sherilynn]

Good advice from Thomas.



I would just like to add that all of the above info must be detailed in a signed Joint Venture agreement, prepared by someone who knows how to draft a good one.



Barry McGuire of Ritchie Mill Law Office in Edmonton has just revamped his JV agreements based on all of the challenges he has seen JV partners face over the years. He knows his stuff so you may want to give him a call. Not sure what he charges for them, but a well-drafted contract is usually worth every penny.

 

[invst4profit]

I am in agreement with all of the above. Hire a lawyer and draw up a legally binding contract between the partners.

You may be friends now but that may not survive the business. Remember from day one you are operating a business, it is not a game or a hobby.



Money comes and goes, friends come and go. Decide what is more important, friends or money, before you sign on the dotted line as business often forces you to chose one over the other and if you are in fact operating a business that decision should be obvious.