“I’m thinking about partnering with someone, what is the best way to structure a partnership?” – Susan of Puyallup
First off, partnerships can be absolutely wonderful and partnerships can be absolutely horrible. It really depends on who you are and who your partner is. I’m lucky to have had the same partner in our business for almost ten years now. I’ve seen a lot of partnerships that have started out great and ended terribly. With that in mind, it is very important that when you set up a partnership you don’t do anything on a handshake. Everything should be documented in writing. You should have some sort of a partnership agreement, an LLC operating agreement, or some kind of arrangement that includes all of the details. This way if a dispute were to arise, or if somebody were to die, get divorced, steal from the company, or become a non-active partner that you have already established a resolution. I seem to think that more partnerships fail than succeed so a partnership is definitely something I suggest treading lightly on. I also highly recommend consulting with an attorney on any partnership that you plan on venturing into. It is money well spent to ensure that your partnership is set up with an enforceable contract if problems arise. That being said the strength of a partnership depends on who the partners are. Partnerships work well when everyone is making money, but when people aren’t making money I have seen them go awry very quickly.
James Dainard is one of the founding partners of Heaton Dainard, LLC. He has been buying and selling real estate in King, Snohomish, and Pierce County for the past eight years. James has built a reputation in Washington for providing investors with multiple exit strategies and supplying them with easy and fast lending sources.
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