So how do I team up with another person for my real estate investing?

Partnership Handshake


Over the years our team here at has partnered up with a lot of people to do our real estate transactions.  I have had a bunch of calls from members of MAREI who want to team up with each other and they want me to tell them how to do it.  While I am in no way qualified to help two parties determined how they want to form their partnership and work together, and I highly recommend consulting with an attorney on the matter, I can share a few ways that we have partnered with others.

Team Members:  Here at KCInvest, we truly feel that our title people, contractors, realtors and mortgage lenders are actually our partners.  While they don’t have a true financial stake in our business, we do value their expertise and input on every transaction that they help us complete.  They get compensated for their time and effort by giving us a bill and we pay it.  So one of the first places to start partnering is finding good team players that will provide you with a quality service for a economical fee.  Should you decide you no longer want this person on the team, just don’t hire them to work for you again.

Money Partners:  We have also utilized money partners through out the years to fund our deals.  We don’t have a formal partnership agreement, but rather a simple lending agreement where the private money partner lends the funds for the transaction for either a set interest rate, a set fee, or a portion of the profits.

This all started when on of our Team Members above came to us and wanted to lend us the funds to do one transaction for a $5,000 fee.  He provided all the funding to purchase the house, rehab the house, and pay holding costs.  We bought the house, renovated it and sold it.  We paid him his money back, plus $5,000.  We kept all the profit.  Everyone was happy, except this Team Member decided he wanted to be a real estate investor and do it all himself, but he found out it was not as easy as he thought.

Our next money partner is a money partner to this day.  A family member saw all the deals we were doing and what we were paying a bank to borrow money.  This family member came to us and asked if he could fund our deals.  At that time he funded 100% of the transaction and got paid a set interest rate.  That interest rate has varied over the years and now sometimes includes part of the profits, all depending on the deal and pretty much how much cash he has available at the time.

Another money partner, did the same as above, except he wanted 50% of the profit on the deal.  Which at the time he was lending us worked out quite well.  However as our funds available with other partners, that had a much lower price tag grew, our need to pay out 50% of our profits went down and we no longer do deals with this partner.

All of our money partners wired funds into the title company at closing and received a promissory note and a deed of trust (or mortgage in KS), were named on the hazard insurance and were protected by a title insurance policy.  However they had no input on the transaction, they just sat back and collected a check.

Hand Shake Partners.  We have had 3 partners that we partnered with somewhat of a handshake.  They were not lending us money, but rather their time and their expertise to help us locate and purchase houses.  They were not employees as they worked had their own company.  So how did this work.

First we sat down and between us determined what kind of work they were going to be doing.  Who was going to buy and fund the deals and manage all the paperwork.  We also defined who got paid what, what a profit consisted of and how it was to be documented.

Then on a deal by deal basis, this deal had a break down something like this:

  1. We pushed out marketing to find the deal, did research, and procured the leads.
  2. Hand Shake partner took the seller’s calls, looked at properties and purchased the properties on paper (or bid at the courthouse)
  3. Money Partner funded everything as listed in the Money Partner section
  4. We did the rehab if any, again funded by the Money Partner
  5. We did the marketing to sell.
  6. Hand Shake Partner took buyer calls and negotiated the sale.
  7. We sold the house and went to closing and got the big check.
  8. Out of the big check the proceeds went as follows
    1. Money Partner got paid first as outlined in his promissory note
    2. Handshake Partner split profits with us

Now we did have a basic agreement in writing so we could all remember what was agreed.  We would discuss and change that agreement from time to time and the Hand Shake Partner very much had a say in how the deal would proceed.  However, when we parted ways with this Hand Shake Partner, all we had at risk was the current deal we were working.  We finished out that deal and we both parted ways.

In all of the above transactions we took the time to get advice from some very trusted advisors.  Two of which included Ron Kraft, attorney and former owner of Accurate Title as well as attorney David Nachman.  I thought it would be very beneficial for all of our members thinking about being a partner or getting a partner to learn first hand what the attorney’s will have to say on the matter.  Please note this 70 to 90 minute presentation on April 12th would cost you about $350 to $500 if you were to sit down individually with just about any attorney out there.  So be sure to be there.

Now is doing more partnering in the arena of notes.  We are learning about pooling money from several money partners to lend to several other hand shake type partners.  This puts us in the arena of syndication and securities, stuff that we have been studying for many years.  Recently Don Tucker and I had the opportunity to sit down with Securities Attorney Gene Trowbridge in a small round table setting.  There were about 12 of us that had a general idea of the concept of raising money and secured investors, how ever he started by asking us if we had any questions and we just did not have enough knowledge to start asking questions.  So my question was, what should we ask and he proceeded to explain the basics in simple and easy to understand terms.  However, I think I need to hear his presentation about 5 more times before it’s going to sink in fully.  So we have asked him to join us on a Webinar on May 19th.

Both of these events are on the MAREI calendar of events above.  Be sure to take the time right now to pre-register.

Kim Tucker along with husband Don and son Scott buy and sell houses in the Kansas City Metro and from time to time fund a few transactions for by acting as the Money Partner in a transaction.  If you have a house to sell them, please submit at and if you are looking for your next investment property to purchase, please be sure to register as a buyer at