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Real Estate Investing Contracts...

Los Angeles, CA |

I am a real estate agent and I have an investor who wants to invest in real estate fix and flips. They want to partner with me and go 50/50 on any deals we do. I will do all the work in finding the deals and selling the properties and they will put up the money. Like a silent partner. Can someone tell me what types of contracts I would use for this? I also want to give them the deed to secure their investment. I already setup a corporation and am in the process of finding deals. Also i would like to know a range of costs for the contracts. Please advise. Thank you

Attorney Answers 3


  1. You would need a partnership agreement that would cover everything. I can prepare one that covers all of your needs for less than $2000.00.

    The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.


  2. Personally, I like using LLC's for my clients that engage in real estate ventures of this type. You should place the asset in the name of the entitty with them having a priority on return of their initial capital investment in the amount of the money they put up for the property. Also, in your case, require unanimous consent as to disposition of the property. These powers and requirements will be refelected in the operating agreement. My hourly billing rate for Avvo inquirers is $250.00 per hour, plus costs.


  3. In addition to the other things mentioned above regarding corporate structure, you must be mindful of your DRE requirements. If your commission is part of the enterprise, you should determine that you are not improperly fee-splitting with non-licensees. I suggest you call the DRE hotline. Though I am NOT a tax advisor, it is worth mentioning that, if your commission is part of the contribution to the venture, you may have tax consequences for the income which could cause you to have a different net result from your partners so please consult with a tax advisor.

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