The HuntingPA.com Outdoor Community banner

1 - 20 of 39 Posts

·
Registered
Joined
·
557 Posts
Discussion Starter #1
I have a cabin with some property and a friend that has been asking to become a partner in it. Hypothetically, let’s say that the property just appraised for $100,000. What would an appropriate charge to become a 50% partner. When I had the appraisal done, the agent said that if I was selling it, that he would have listed it for a higher amount, hoping to get the $100,000. But bringing in a partner would be a cash transaction, with no realtor fees and no sales tax. So I was thinking it would probably be appropriate to do it at a discounted rate, I just wasn’t sure how much. If anybody has done this how did you handle it? Thanks.
 

·
Registered
Joined
·
1,724 Posts
Having good partners can be fantastic. Having a partner can become a nightmare. Think over all the things that move could bring.
If you feel very strongly that you would like to keep control of major issues concerning the camp, sell less than 50%. If financially you can handle it yourself, my advice is to keep it.

I have dealt with absentee owners for 17 years. One absent when the bills are due. Not 1 minute of work from any of them. Not 1.00 from them for equipment, service of equipment or driveway maintenance. 1/4 mile driveway. I could go on and on.

Second thought, Keep it if you can and tell your buddy he can contribute all he wants and use it when he wants to. Perhaps break it down to a yearly payment you both can live with.

Consider if you have children, they will be owners someday with the partners heirs. Just one nightmare possibility. Good luck!
 

·
Registered
Joined
·
2,368 Posts
Singularity, when it comes to money, property, assets, etc. is the ONLY way to go unless you are aging and want to move some of those assests to your children so the govt doesnt take them away from you and your family when you die.
 

·
Banned
Joined
·
24,445 Posts
I have a cabin with some property and a friend that has been asking to become a partner in it. Hypothetically, let’s say that the property just appraised for $100,000. What would an appropriate charge to become a 50% partner. When I had the appraisal done, the agent said that if I was selling it, that he would have listed it for a higher amount, hoping to get the $100,000. But bringing in a partner would be a cash transaction, with no realtor fees and no sales tax. So I was thinking it would probably be appropriate to do it at a discounted rate, I just wasn’t sure how much. If anybody has done this how did you handle it? Thanks.
50% of FMV would seem reasonable unless there's some associated intangibles such as having neighbors that allow you to hunt on their adjoining property or other types of unseen valuables unknown to realtor doing the appraisal. First & foremost.....KNOW YOUR PARTNER(which I think is obvious) before affixing his name to deed. Without knowing your financial condition it's sometimes financially advantageous to split ownership, risks & associated expenses. Best of luck!!
 

·
Registered
Joined
·
3,690 Posts
Im with others on this one, Id avoid it if at all possible. If your buddy really wants to feel as though he is part of a camp you could always do a short term (yearly) lease to him. He can pay $X a year which should cover a portion of the taxes and yearly upkeep and allow him access to the camp whenever he wants. That way he can feel as though he is part of the camp, he can help contribute to the yearly costs and you retain all ownership and ultimately say of whatever goes on.

The only way it would make sense to include him as an owner is if you absolutely need the short term financial windfall you would get from this. If you do add him I wouldnt just do a 50% split of the property value. Assuming the realtor isnt taking in account the value of things that typically do not sell with a property...tools, tractors and so forth. If you have any of that and it would become partially owned by him Id come up with a market value and add that in. It can be a slippery slope but no way would i just throw that stuff in. Also, Id make it somehow that the camp is setup legally so that if this guys wife or future wife cant take you to the cleaners later and either force you to buy back (at probably a higher rate than todays value) or sell the camp so she gets her 50% worth if there was a divorce or even worse a loss of life to your new "partner"
 

·
Banned
Joined
·
24,445 Posts
Owning assets in a partnership is common & is in successful existence in virtually millions of arrangements. No reason on a small time basis as this that it cannot be advantageous. Impossible to discount such without knowing ANY surrounding facts by thinking of your own personal situation(s).
 

·
Registered
Joined
·
557 Posts
Discussion Starter #12
So here is my story- I was aggressively paying off the mortgage and it should have been almost paid off, or so I thought. Wife (at the time) was not actually making the extra payments. That money is gone and who knows where. She files for divorce. Couple of the kids approaching college. Lawyers stirring the divorce fire to get the most money out of us. Could I pull it off by myself? Possibly, but I am very financially conservative and I don’t like to be stretched as thin as this would make me. Lots of unknowns as a custody trial approaches. So added expenses ahead. I bought the cabin for myself and dad primarily, other family members would also hunt it. Dad passed away, other family members don’t want to join. They would rarely show up to work days anyway so that’s ok. Buddy is a great, hardworking guy. He’s been up several times and works hard. We don’t have to tell him to get off the couch to help with chores. He is in good financial shape. Lesson learned from this- try to marry the right person and go over all financial documents with the spouse every month. In regards to this, it would be nice to have help with the big item expenses ( roof, hot water tank, etc). Plus, I know he’d work hard to put in new food plots and help with the existing ones. I get there as much as I can, but with active kids free time is rare. So I wouldn’t mind if someone else used it to help with upkeep. Good points about writing in if he faces divorce or financial issues. I’d also write by-laws because there are times I just want to be there with my family by myself, and I’m sure he’d feel the same. It’s a tough decision and each answer could be the right, or wrong answer.
 

·
Registered
Joined
·
7,750 Posts
When ask how much something was, my grandfather's pat reply was always.....

"a buck tree fiddy".

So I guess I'd charge "a buck tree fiddy"!

In all seriousness, I'd think think it through pretty hard. I've seen a lot of these deals go bad.
 

·
Registered
Joined
·
12,347 Posts
Avoid it at all costs. If you fail to adhere to that advice, get a written agreement. You want certain provisions that make sure you don't lose it or end up in court for whatever happens in his life. Once represented a woman who owned a house in partnership with a guy she was not married too. Their written agreement specified that they each would pay one half of all bills connected to the property AND in the event one did not come up with their half in a certain time limit, the partner who paid received an extra owner ship percentage when and if the partnership was partitioned or the property sold. The partner remained on the hook for half of all future payments after that, even though ownership might no longer been 50-50. In the event that the new partner suffers a divorce, lay off, or other problem requiring he divest himself, the initial owner has the absolute right to buy out that leaving partner's half for the initial price prorated up or down for payments made during the partnership over his half, with NO INTEREST. The woman I represented ended up making almost all the mortgage payments on the house after her man decided to quit work to write the great american novel. Instead he started looking to other women for inspiration and the manure soon hit the ventilation system. He sued for his half and ended up getting a payment of about $12,000 after all the adjustments. His initial contribution to the purchase was over $40K. If you suffer a weak moment and decide to go with that, you need such an agreement to protect you.

For instance, you both have 50 k in it. In year two, he is short and can't pay his half of taxes and insurance of $1,000 each. Partner A pays it. The partnership adjusts to 51K to 49K and he is still on the hook for half of future payments. Place needs a new roof costing 4k and he has no money, laid off. Original partner pays and the shares go to 53K-47K Everything continues fine for another ten years and new partner gets a divorce and wife demands her half of his share. his share is still 47K or 47% And even though the place might now be worth $300K, original owner gets to buy them out for $47k rather than go through a sale. If either partner dies the place is appraised and sold or survivor buys out the heirs interest. If the original owner dies, and the heirs and new partner agree to sell for $300,000, heirs get $159K (53%) and new partner gets $141K (47%)
 

·
Registered
Joined
·
21,259 Posts
If you are in the middle of divorce proceedings, you'd better not do anything until the part of the cabins value that goes to your wife is determined. Lawyers wont miss this and if she is entitled to anything at all, you might have to buy her out, or sell the place and split the money.
 

·
Registered
Joined
·
336 Posts
This is just my opinion. Years ago ( 1981 ) myself and 2 other good friends bought a camp with property in Tionesta. All went well for a few years until I brought up the idea of drilling a well and putting in running water and a bathroom.
We had no water unless we drove 5 miles to a spring along the road and filled up 5 gallon containers and carried them back to the camp. That caused a major fight , so I dropped the idea . A few months later while we were getting firewood at a local saw mill I brought up the idea that since we were getting firewood for the outside fire ring we should think of putting in a wood stove. Yep, another argument started, I could not understand why they were against a wood burner mostly because at the time we heated with kerosene heaters and the fumes were brutal , aside from the fact that most of the time when we would arrive at camp it was after the stations that sold kerosene had closed and the cans were usually empty or almost.
Finally , one of the guys wanted to sell because he no longer wanted to hunt , so the two of us bought him out . A few years went by and I by and I became tired of doing all the work and having far to many arguments , so I approached my CAMP PARTNER and asked him if he wanted to sell due to his lack of interest in the camp and if so I would buy him out. His reply was that he wanted to sell but he didn't want to sell to me and would not sell unless we sold to someone else . I was shocked but not surprised so in 1994 we had a relator list the camp and it sold .
About a year later I bought my own place , I own it , I make the decisions , I do the work around the camp and the expense falls solely on me. Don't get me wrong its tough and expensive at times but I would have it no other way.
As a few others have said , don't do it . The two guys I was in with were friends since high school and the last thing I thought would happen , did.
 

·
Registered
Joined
·
106 Posts
We incorporated our camp as a non-profit to prevent any wives or whomever from forcing a sale. Also have by-laws that set member share price which we review every year. Good by-laws are essential!!!
 

·
Registered
Joined
·
7,750 Posts
We incorporated our camp as a non-profit to prevent any wives or whomever from forcing a sale. Also have by-laws that set member share price which we review every year. Good by-laws are essential!!!
Plenty of good reasons to incorporate, but in PA, real property in divorce proceedings is not up for consideration unless both husband's and wife's name name are on the deed. If you own property with only your name on the deed, the soon to be ex-wife can not touch it. They can, however , come after shares in incorporated clubs, and lay claim to half the value of that share. Pay half share value to your ex-sweetie , just to keep your share.....

That's how I understand it, anyhow.
 

·
Registered
Joined
·
9,982 Posts
hard to tell you any good advice , never been married or in your position . but if it was me , I would keep it and try to make a go of it, pending the out come of your divorce. If you go in with your friend , make sure you get everything in writing as far as taxes and what happens upon death of either one of you and who gets what to your and his heirs. good luck.
 
1 - 20 of 39 Posts
Top