Partnership With Family
I am thinking of partnering with my brother to purchase Real Estate, rehab etc. What are the pros and cons of partnering with family members. Is it advisable to do so Or go it alone? Can money be a sticking point? I would appreciate any personal experiences and how you went about it.
Thanks.
While it generally is not a good idea, it really depends on the individuals. I know of a set of brothers that have been in business together very successfully for several years. I also know a set of sisters who didn't speak to each other for several years after attempting to be in business together (one greatly took advantage of the situation).
If your brother wasn't your brother, would he be someone you'd want to be in business with? Does he bring something to the table? If you see something that doesn't seem right, would you approach him differently because he's your brother? Or overlook it entirely? If things went sour, would it damage your relationship? Would you still have Thanksgiving Dinner together??
While it can work, it often leads to hard feelings.
As HRParks said, it all depends on the individuals. I also know two brothers in my area that have been investing for years together successfully. However, they both bring something to the table. The one brother finds the deal and supplies the funds/credit to close the deal. The other brother handles the rehab part of the project as his part of the investment. They defined each other's role and responsibilities from deal one and it seems to work fine for them.
Good luck in whatever you decide.
Dave
[addsig]
I'm also considering a partnership w/ family(cousin). Is there any contract templates out there that we can edit and agree on prior to partnering. We both have something to bring to the table. I have the credit and he has the capital.
Just understand that partnership-gone-wrong is LOVED by lawyers, because of all the fees they generate.
On any proposed p'ship, both/all prospective partners go see a lawyer before entering any agreement, have the L do the agreement, have all P's sign, then you're in business.
Thanks johnmerchant!!! I guess I was trying to do it the cheaper way. But I guess I should go w/ an L
Aw heck! So now you're gonna cut your local lawyers out of the p'ship fight?
What a poor sport!
My husband and I began partnering with each of us needing the other's attributes- I have the capital- he has the know how and hands-on skills.
I've read many times that if you don't NEED a partner, don't have one.
We tried to involve his brothers in our success by giving them jobs on our projects- painting and haul-off, etc. Even tho' we had our agreements with them in writing, one brother still demanded more money from us than we had agreed in writing to pay him and he wanted to fist fight with my husband over it and it severed the relationship. We don't have Thanksgiving dinner with them anymore.
If you don't NEED to partner with your family, then I recommend against it.
What is your brother's credit like? That may be a good indicator of what kind of partner he will be. Does/did he pay his child support without griping?