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#204: The Simple JV Partnership Structure Any Investor Can Use With A Money Partner
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In this episode, I dive into a topic that many active multifamily investors struggle with - how to structure partnerships when working with just one large LP or money partner. I share a simple partnership structure that can help you navigate this process effectively. Please note that while I provide conceptual advice, it's important to consult with an attorney to ensure compliance with legal requirements.
Throughout the episode, I walk you through a hypothetical situation, explaining how I personally approach and have successfully implemented this structure in our business. I cover important aspects such as operating agreements, preferred returns, splits, and overall value creation.
In this episode we discuss:
- How can investors compensate their money partner with a preferred return and profit split?
- What are the considerations when structuring the deal to meet bank requirements and SEC compliance?
- How can investors navigate the equity threshold with the bank when bringing in a big investor?
- What are the benefits of using a preferred return and profit split structure in communicating with investors?
- How can investors start putting together joint ventures and partnerships with this structure?
Are you a new multifamily investor looking to grow your portfolio but don't know where to start? Are you an existing multifamily investor looking to scale your business and master advanced topics such as capital structure, finding off-market deals, and establishing JV partnerships? Click here to learn more about 7-Day Multifamily, a program in which I teach investors the foundational skills they need to start and scale a multifamily portfolio rapidly.
Are you looking to invest in real estate, but don't want to deal with the hassle of finding great deals, signing on debt, and managing tenants? Aligned Real Estate Partners provides investment opportunities to passive investors looking for the returns, stability, and tax benefits multifamily real estate offers, but without the work - join our investor club to be notified of future investment opportunities.
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