Avid Investor Offering To Partner With Me
I have been talking to a very successful real estate investor who has been providing me with information quite generously. What he has told me is that he has partnered with people all over the country with multi-unit apartment buildings and would share the profits and costs 50/50. I have not met him but he sounds quite sincere and is willing ti fill out a legal contract about our partnership. He says both our names will be on the contract. He usually controls the property via lease option.
Do any of you have tips on how to handle a partnership like this?
Hmmm. You haven't really shared any of the specific details to this partnership (and shouldn't), however, from what you have posted, I'd be quite a bit cautious on this one.
Namely, if this investor is so successful why is he willing to a) disclose so much of his method of success freely and b) messing with a newbie (assuming from the post that you are, indeed, new to investing).
Since I don't know the terms of the partnership, I can't tell you my opinion on whether it's a good idea to pursue or not. I can, however, say that if it requires you to be the "money man," then I'd definitely be going over it with a fine-toothed comb. If that is the case, then it sounds like a classic scam. However, you'll really have to make that judgement on your own, based on the information that was presented.
Roger
Rajwarrior,
You are absolutely right in proceeding with caution...I certainly am. There is no way that I will be the sole "money man". So far, we have only been talking but if we are going to split the profits 50/50 then the risk will definitely be 50/50 as well as all the payments. What I wanted to gain from this is to learn from someone who claims he is making about $100k a month. He sounded sincere on the phone and sounded very generous with his knowledge...
Ahh your second message is more clear. After your first message I was left thinking, "why does this guy need you?" Now it is clear to me that he needs your money.
I would suggest putting the property into an entity owned 51% by you and 49% by the investor. Additionally if your role is purely passive, I would make him all officers except vice president.
This means that he will be in complete control of the operations of the company unless you start to disapprove. At that point you can declare an emergency shareholders meeting and elect yourself president. You can do this because you own majority shares in the company.
These terms should be related to an LLC likely. I have never partnered with anyone using an LLC (because all of my partner investments are short term) so I would suggest to seek an attorney to help you set up something that will protect you.
GOOD LUCK
Robert_L, I was talking to a man who sounds very much like your guy. A man by the name of Claire. Very nice, lots of claims to success. Seemed like he was all talk.
I would have to ask why he needs your money if he is so successful. Not that it is unheard of. Before you plunk your hard earned money down, I suggest you verify some of his past deals. See some proof. Talk is cheap.
Paula