A California real estate partnership may offer many advantages, and particularly if you need to expand your access to resources, capital and related opportunities. Embarking on a real estate partnership also involves inherent risk, though. It is important that you take steps to minimize these risks and protect your interests as much as possible.
According to Medium, there are several tactics you may want to employ to protect yourself when establishing a real estate partnership. Some recommended steps are as follows.
Establish a limited liability company
If you have equity in an investment property, consider creating an LLC and then transferring the title of the property to it. Why? Doing so helps protect your home or other personal assets in the event that someone attempts to hold you liable or files a judgment against you.
Say, for example, that a tenant suffers a serious injury as a result of the conditions at your investment property. Having an LLC shifts the liability away from you personally, thereby protecting your personal assets.
Determine who holds what roles
When entering into a real estate partnership, be sure to be clear about roles and expectations. Determine who is going to be active in the partnership and whether any silent partners exist. Clarify, too, who holds decision-making authority when it comes to your investments, and when. It also may serve you well to determine how long you want to the partnership to last.
Taking time to make these considerations before disputes arise helps protect your assets and interests and may, too, save you substantial money in the long run.