Buying
Buying with partners
Pooling money with partners can get you a better building than any of you could buy alone. It works best when the hard questions get answered before anyone falls in love with a property. Sign a written agreement on money, decisions and exits before you make an offer.
Buyer representation
What buying with partners involves
A plain explainer if you’re new to this.
- What it is
Owning a property together
Two or more people or companies buy a property together, to share the down payment, the risk and the work.
- How ownership works
Title or a company
Partners can hold title directly as co-owners, or own a company or partnership that holds the property. Each setup treats tax, liability and lending differently.
- The agreement
Write it down first
A written agreement should cover who puts in what, how decisions are made, who pays shortfalls, and how a partner can sell out.
- What I check
The property and the plan
I do the same checks as any purchase, and make sure the partners agree on how long to hold and what they want from it before an offer goes in.
General information, not tax or legal advice. Rules and rates change, and every situation is different. Talk to your lawyer and accountant before you act on anything here.
Sort out the partnership first
Before we look at buildings, I’d want you and your partners to agree on a few things in writing:
- How you’ll hold title. In your own names, through a company, or through a partnership. Each has different tax, liability and transfer-tax results, so your lawyer and accountant should help pick.
- Who can sign. Lenders, sellers and lawyers will want to know who has authority to bind the group. I’ve seen deals stall because one owner thought they could sign for the others and couldn’t.
- Who puts in what. Cash, guarantees, time and management all count. Write down who does the books, who deals with tenants and who approves spending.
- How someone gets out. A buy-sell clause, a right of first refusal, or a shotgun clause in the agreement. Plan the exit while everyone still gets along.
Financing with more than one owner
Most commercial lenders look at each borrower and often ask for personal guarantees. If one partner’s finances are weak, it can change the terms for everyone. Talk to a lender or mortgage broker as a group early.
Raising money from a wider group
If you’re pooling money from people who won’t be active owners, securities rules can apply. Ask a lawyer before you take anyone’s money.
How I help
I find and check properties that fit the group’s plan, put the numbers in one place so everyone sees the same thing, and keep the offer process moving when several people need to agree.
Questions people ask
Should we buy in our own names or through a company?
It depends on tax, liability, financing and how you might sell later. A share sale of a company that owns real estate can be treated differently from a sale of the land itself. Ask your lawyer and accountant before you write an offer.
What is a shotgun clause?
A buy-sell clause where one owner names a price and the other must either buy at that price or sell at it. It gives a clear way out, but it favours whoever has the cash, so think it through with a lawyer.
Can one partner sign the offer for everyone?
Only if they have the authority. Check title, the company records or your partnership agreement, and give the right person written authority before you make an offer.
What should I gather, ask and watch for?
Documents to gather
- Financing pre-approval
- Accountant’s advice on structure and tax
- Your criteria and limits
- Budget for reports and closing costs
Questions to ask
- What does the lease or the court order or the agreement actually say?
- What reports exist, and how current are they?
- What are the risks if the plan changes?
- How will I exit in a few years?
Common mistakes
- Skipping legal advice on structure
- Too short a condition period
- Assuming the seller’s numbers are right
- No written plan for disagreements or exits
Typical timeline
- Before offersFinancing and structure
- Condition periodTypically 30 to 60 days
- Completion30 to 90 days; court-ordered sales follow the court’s timeline
- AfterOwnership, insurance, management
Typical ranges. Your lease, lender and the City set the real dates.
Go deeper
If you’re looking for more details
Partnership agreement checklist
- How title is held, and each person’s share
- Who has authority to sign, and for what
- Who contributes cash, guarantees and time
- How decisions get made, and what needs everyone
- How profits and costs are split
- What happens on death, divorce, disability or a dispute
- How someone sells their share, and how it’s priced
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Next step
Buying with partners?
Tell me who’s in, the budget and what you want the property to do. I can help you get everyone looking at the same numbers.