{"id":421,"date":"2021-05-10T01:38:31","date_gmt":"2021-05-10T01:38:31","guid":{"rendered":"https:\/\/wordpress-655153-2137993.cloudwaysapps.com\/?p=421"},"modified":"2021-05-10T01:38:31","modified_gmt":"2021-05-10T01:38:31","slug":"msfire24","status":"publish","type":"post","link":"https:\/\/msfiremama.com\/msfire24\/","title":{"rendered":"Partnership Pros & Cons"},"content":{"rendered":"\n
Disclaimer: This is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal or financial advice related to individual situations. Consult with your own CPA, attorney, and\/or other advisor regarding your specific situation.<\/em><\/p>\n\n\n\n Partnerships are a great way to reduce risk, share responsibility and have an ally<\/a> in your real estate adventure. For some, it helps accelerate the investing process and creates lifelong friendships. For others, it becomes a burden and like a summer fling, it\u2019s good while it lasts, but ultimately needs to end.<\/p>\n\n\n\n Why Partner?<\/strong><\/p>\n\n\n\n Like any great relationship, partnerships work best when each side has complementary strengths. We entered a partnership when we decided to pursue short-term rentals. We had capital we wanted to deploy and wanted a partner to manage the property, including the rental process. We found investors that had been renting to traveling nurses and we thought their experience, coupled with their network, could be a good fit for our goals.<\/p>\n\n\n\n A huge piece of this is finding people that have the same values and that you trust. A business relationship is a relationship. You have to cultivate it and check in so you continue to be in alignment and understand any concerns or challenges the partner(s) may experience. It also requires setting up guidelines, expectations and division of duties. <\/p>\n\n\n\n How to Enter a Partnership<\/strong><\/p>\n\n\n\n The first step to creating a partnership is finding that person or people that you want to enter a business relationship. Roofstock<\/a> advises preparing for the discussion the same way you would for a job interview. You can also look at it like getting ready for a first date. While you are trying to sell yourself or a business plan, you are also evaluating a person or group based on how they complement your strengths, weaknesses and goals.<\/p>\n\n\n\n Once you\u2019ve determined that you\u2019d like to partner, you need to flesh out who is responsible for what, expectations for each role, how much money each group is contributing and how profits will be distributed. While these are some of the most important items, a lot more pieces of business need to be discussed and documented. It is highly recommended to consult a real estate lawyer to draw up an operating agreement and consult a financial advisor. These professionals have experience and templates to help you create a successful partnership.<\/p>\n\n\n\n Professionals can also help you decide what kind of partnership to create under what kind of entity whether it\u2019s a limited liability corporation (LLC), an s-corp<\/a> or if you should create a partnership or limited partnership<\/a>.\u00a0\u00a0<\/p>\n\n\n\n