Real Estate

Pooling Capital for RE

  • Last Updated:
  • Oct 21st, 2020 8:43 pm
Tags:
[OP]
Newbie
Oct 29, 2016
6 posts
1 upvote

Pooling Capital for RE

I am wondering if anyone here has pooled capital with others to enter a real estate deal. I am trying to figure out the best structure in a situation where others provide capital (down payment) but they are silent partners and I am managing the property, taking on the mortgage and doing the work. I was thinking about doing an LP structure where the silent partners were limited partners and I was the general partner? Has anyone done this before who can advise on the best route to take?


Thanks,
4 replies
Deal Addict
Jan 1, 2017
1190 posts
1027 upvotes
Best advice is not to do it. How would you handle the scenario where one partner wants out and his/her money while the other partner does not want out but doesn’t have the funds to buy out the other partner?
Member
Oct 22, 2019
290 posts
260 upvotes
ProductGuy wrote: Best advice is not to do it. How would you handle the scenario where one partner wants out and his/her money while the other partner does not want out but doesn’t have the funds to buy out the other partner?
I agree...happened to meet before where one of the partners was getting married and wanted to cash out. I didnt have the funds to buy them out, so we had to sell.

I'd stay away from this strategy since you only have so much control.
Member
Nov 22, 2019
214 posts
137 upvotes
Best route to take would be to talk to your lawyer. I believe the agreement can be structured as such that the person investing the money, will not be allowed to pull his money out for the first 5 years, provided he agrees to investing on such a condition.

Top