My friend wants me to go in on a business venture with him. He and another guy are starting a rental property company. The idea is to just simply buy houses and rent them out. The overall goal for now is to have 15 houses in 10 years.
He and the other guy live in North Carolina, both have finance degrees, and plan to buy the houses in the Charlotte area. I live in Virginia, so it would be difficult for me to do anything, but they offered me to go in as a silent investor/partner. They've agreed to do all the work and offer me this portion to split the investment with them.
The breakdown in ownership of the business would be this:
Person 1: 37.5%
Person 2: 37.5%
Me: 25%
We would each be contributing about $6,000 toward the down payment of the first property, then the company would hold all profit to re-invest into a 2nd property within a year.
Basically, I just want to know if this seems like a fair breakdown, and if there is anything else I need to know or find out before jumping in. What potential risks are involved? Should I talk to a real estate attorney?
He and the other guy live in North Carolina, both have finance degrees, and plan to buy the houses in the Charlotte area. I live in Virginia, so it would be difficult for me to do anything, but they offered me to go in as a silent investor/partner. They've agreed to do all the work and offer me this portion to split the investment with them.
The breakdown in ownership of the business would be this:
Person 1: 37.5%
Person 2: 37.5%
Me: 25%
We would each be contributing about $6,000 toward the down payment of the first property, then the company would hold all profit to re-invest into a 2nd property within a year.
Basically, I just want to know if this seems like a fair breakdown, and if there is anything else I need to know or find out before jumping in. What potential risks are involved? Should I talk to a real estate attorney?