Are you looking to acquire real estate investments and maybe considering bringing another investor into the agreement? Then make sure you read this blog post first! Buying investment property with a partner can be a great way to invest, if you follow these 3 strategies…
They say “two heads are better than one” and that’s true in many areas, including buying investment property with a partner in Milwaukee. But remember: a partner brings benefits to the table but also adds a layer of complexity to the situation. The best way to make sure you have an enjoyable and mutually profitable investment is to discuss and agree on the following 3 strategies…
Strategy #1. Agree On What Each Partner Brings To The Table
When considering a real estate partnership, it’s easy to focus solely on capital contributions. However, successful investment partnerships often rely on a combination of financial resources, skills, and strategic connections that each partner brings to the table.
For instance, one partner may contribute capital for the down payment and renovation costs, while the other may leverage their expertise in property management, tenant screening, or market analysis. In some cases, a partner’s strong credit score can help secure better loan terms, making financing more accessible for both parties.
It’s also important to consider time commitment. If one partner is investing passively while the other handles daily operations, both parties should agree on compensation—whether that’s through a higher profit split, a management fee, or another structured arrangement.
Strategy #2. Agree On Each Partner’s Ongoing Responsibilities
Once the property is acquired, ongoing responsibilities need to be carefully structured to avoid miscommunication and operational bottlenecks. If both partners plan to be actively involved, it’s crucial to clearly define who handles what tasks—from rent collection to maintenance oversight and tax filings.
For instance, in a rental property, one partner might oversee tenant screening, lease agreements, and day-to-day property management, while the other focuses on bookkeeping, tax reporting, and compliance with Wisconsin landlord-tenant laws. If you’re outsourcing management, deciding who liaises with the property manager ensures smooth communication and avoids double-assigning tasks.
Additionally, partners should discuss how unexpected expenses and emergencies will be handled. Who is responsible for approving major repairs? How will large maintenance costs be split? These are critical questions that should be answered before any issues arise.
Strategy #3. Agree On Each Partner’s Expected Return And Exit
Once the property begins generating income, it’s vital to establish a clear profit distribution plan that accounts for both ongoing cash flow and long-term appreciation. Not all partnerships require a 50/50 split—if one partner provided the majority of capital while the other handles all property management, a weighted equity model may be more appropriate.
Partners should also discuss tax implications—for example, will profits be reinvested, or will distributions be made regularly? If a partner plans to claim depreciation benefits, how will that impact the other partner’s tax obligations? Consulting a real estate tax professional can help structure the deal in a way that minimizes tax liabilities for both parties.
Another critical consideration is the exit strategy. Partners should define:
✔️ When to sell (e.g., after a set appreciation milestone, or in response to changing market conditions).
✔️ How a partner can exit (e.g., can a partner sell their share to an outside investor? Or must they sell to the existing partner first?).
✔️ Dispute resolution methods (e.g., mediation or buyout clauses in case of disagreements).
Summary
Buying investment property with a partner in Milwaukee—or anywhere in Wisconsin—can be an excellent strategy for scaling your real estate portfolio, but success hinges on clear communication, structured agreements, and risk mitigation.
To avoid potential disputes and financial setbacks, partners should clearly define their contributions, operational responsibilities, and long-term financial expectations. Additionally, structuring the right legal framework—such as an LLC or a detailed partnership agreement—can protect both parties from liability and ensure a smooth and profitable investment journey.
Before entering into a partnership, take the time to:
✔️ Document financial contributions and equity ownership percentages.
✔️ Establish a clear operational structure, including property management roles.
✔️ Define profit distribution models and exit strategies.
✔️ Work with a real estate attorney to draft a legally binding agreement.
A well-planned real estate partnership can lead to higher investment returns, diversified risk, and access to larger deals than you could pursue alone. By following these strategies, you’ll create a solid foundation for a successful and profitable partnership.