Learn to protect yourself before buying a property with other investors.

Before buying an investment property with multiple investors, it is highly important to establish a specific ownership structure before you start sending offers. These are some common stipulations you should review with other investors.

Tenants in Common

• One of the most common ways for multiple investors to co-own property in the US.

• Each investor owns a fractional undivided interest in the property.

• Investors can have equal or unequal ownership percentages.

• Each investor is responsible for their share of expenses like taxes, insurance, and maintenance based on their ownership percentage.
  

• Any investor can transfer or sell their ownership interest without consent from other co-owners.

• Co-owners have the right to request a partition and force the sale of the property if there are disputes.

Joint Tenancy

• Requires all investors to acquire their interests simultaneously and in equal shares.

• Comes with the "right of survivorship" - if one owner dies, their share transfers to the remaining owners.

• More difficult to establish than tenancy in common as clear intent is required.

Limited Liability Company (LLC)

• Increasingly popular way for investors to co-own property while limiting personal liability.

• The LLC, not the individual investors, owns the property.

• Ownership interests are defined in the LLC operating agreement.
  

• Allows flexibility in allocating profits/losses and management responsibilities among investors.

• Provides asset protection by shielding investors' personal assets from liabilities of the LLC.

Regardless of the ownership structure, it's crucial for multiple investors to have a comprehensive legal agreement defining each party's rights, responsibilities, profit/loss shares, exit strategies, and other key terms to avoid disputes down the line.