There are some distinct advantages when your lender becomes your partner in your real estate business.  A business or person can be your lender making deals with you to reap profits for their company or themselves.  They are looking for loan terms that are favorable to them.  But when a lender wants to join you in your business by becoming a partner the goal changes, the health of the business supersedes all else. The focus now shifts, from profitable loan terms to how to put the real estate business in the best light.

A 2 partner arrangement generally looks like this:

  • Each party puts up a 50% contribution
  • Each part gets 50% of the earnings
  • Each party has equal voting rights
  • Each party is ½ Owner
  • Each party receives 50% of the profits

Depending on the amount the lender wants to invest and the amount they want to deal with the day to day work will make each partnership arrangement unique.  There are endless possibilities based  on percentage invested, percentage of profits and percentage of voting power.

Key Points:

  • 1Look for a lender partner that can increase your success
  • 2Lender partners may want to make a percentage of the invested capital and not get involved in the day to day running of your business.
  • 3Do not rush into a partnership quickly, make sure you are well suited to working together.

The lender should no longer be your foe in this, but a partner participating in the upfront risk in building of your business.