Opinions on a partnership shop - Pirate4x4.Com : 4x4 and Off-Road Forum
 
Pirate4x4.Com : 4x4 and Off-Road Forum  

Go Back   Pirate4x4.Com : 4x4 and Off-Road Forum > General Tech > Shop and Tools
Notices

Reply
 
Share Thread Tools Display Modes
Old 01-08-2008, 10:22 AM   #1 (permalink)
Registered User
 
Join Date: Apr 2002
Member # 11283
Location: Western WA
Posts: 444
Opinions on a partnership shop

I was going to build a stick built garage on my property, but my wife brought up a great point about building an off-site shop. This would give me a larger space for about the same money. I'd be going in with my sister & bro-in-law who owns a house refurbishing/insulation company he runs out of his house, and my dad and grandpa who have boats to store and work on. We'd build a 40x120 GenSteel building and divide it into 3rds giving us each a 40x40 space. The land would need to be purchased, $40k, building with shipping from CA would be about $40k, and I figure another $40k to do slab, erection (we'd be doing most) wiring etc ought to cover it. Each 1/3 would have it's own utilities hooked up.

Big concern is the complexity of a partnership like this. I already figure we'd have to form an LLC to protect the building if one party were to get sued or assets were seized, the building would be protected.

I'm looking for more information on things we might be overlooking, and how complex things might get. What kind of tax issues can/will we run into (I know every state is different). I know people always say don't go in with family, but we are a really close family, and this is very cut and dry. It's not like we're in business together, just owning a building/land together.

I figure someone here may have run into the same thing or have a similar setup.

Thanks,
Steve
WillisXJ is offline   Reply With Quote
Old 01-08-2008, 10:45 AM   #2 (permalink)
Registered User
 
Join Date: Dec 2001
Member # 8916
Location: KC MO
Posts: 368
Quote:
Originally Posted by WillisXJ View Post
Big concern is the complexity of a partnership like this.

I'm looking for more information on things we might be overlooking, and how complex things might get. What kind of tax issues can/will we run into (I know every state is different). I know people always say don't go in with family, but we are a really close family, and this is very cut and dry. It's not like we're in business together, just owning a building/land together.

I figure someone here may have run into the same thing or have a similar setup.

Thanks,
Steve
I don't care how close your family is it will become less close when you start integrating your financial resources. Your gramp will eventually borrow a tool and loose it or your brother in law will hire a loser who will steal something belonging to another family member. One of your friends will eventually look at you sister's 16yo daughter the wrong way. Way easier to keep your shop space separate where you can watch your own stuff and be responsible for it. Plus, if times change and you want to move to a nicer home you don't have those ties forcing you to put anything ahead of you, your wife, and your kids. Plus, how compatible are metal fabbing and boat storage?
John...

Last edited by roverjohn; 01-08-2008 at 10:47 AM.
roverjohn is offline   Reply With Quote
Sponsored Links
Old 01-08-2008, 10:51 AM   #3 (permalink)
Window Licker
 
bgaidan's Avatar
 
Join Date: Aug 2004
Member # 34948
Location: VA Coast
Posts: 1,616
If you're making 3 completely divided shops with no interaction between them you'll be much better off. If you're talking about one big open building and sharing the space, forget it.
__________________
Quote:
Originally Posted by ironpig70 View Post
I love Dicks and will continue to shop there.
bgaidan is offline   Reply With Quote
Old 01-08-2008, 10:54 AM   #4 (permalink)
Rock God
 
Join Date: Apr 2006
Member # 70555
Location: Greensboro, NC
Posts: 1,661
Quote:
Originally Posted by roverjohn View Post
I don't care how close your family is it will become less close when you start integrating your financial resources. Your gramp will eventually borrow a tool and loose it or your brother in law will hire a loser who will steal something belonging to another family member. One of your friends will eventually look at you sister's 16yo daughter the wrong way. Way easier to keep your shop space separate where you can watch your own stuff and be responsible for it. Plus, if times change and you want to move to a nicer home you don't have those ties forcing you to put anything ahead of you, your wife, and your kids. Plus, how compatible are metal fabbing and boat storage?
John...

I'm gonna have to 2nd this. I get along great with my parents and inlaws, but I'd steer clear of this. It may work out fine, but it would suck to have problems that mess up a good family relationship.

There are plenty of stories of similar situations going sour. Friends and family seem to screw you the hardest and fastest when things don't work out.
__________________
clicky---> Facebook Jim's Garage
http://www.mandmfab.com/
rock mafia is offline   Reply With Quote
Old 01-08-2008, 11:36 AM   #5 (permalink)
Registered User
 
fj40guy's Avatar
 
Join Date: Jan 2002
Member # 9576
Location: Texas... off 183A
Posts: 2,292
Nice thing about my shop, it is 50' from my back door.

Even is the shop is only 3 miles away, there is still time going back and forth. Those tools you need around home, you need to duplicate to make sure that Saturday Plumbing job is taken care off.

Wrenching and needing tools in two locations at once is a pain.

(Meanwhile find a good place to invest the $40K at 8% interest.... )
fj40guy is offline   Reply With Quote
Old 01-08-2008, 11:41 AM   #6 (permalink)
Registered User
 
Join Date: Jun 2002
Member # 12499
Location: In a Snap-On truck tryin' to make it pay
Posts: 10,867
I had a shop 0.8 miles from home. It was a huge PITA to go back and forth.

My new shop is a coupla steps from the home.

Build at home!

If you must do this, form a corporation to manage the building. Each unit must be stand-alone. Plan for the family to fall apart and if it doesn't, consider yourself lucky! I am not in business with anyone I don't sleep with
PTSchram is offline   Reply With Quote
Old 01-08-2008, 11:53 AM   #7 (permalink)
Registered User
 
Join Date: Aug 2006
Member # 78096
Location: Kingsport, TN
Posts: 1,408
Do it at home. I thought about a shop further away but the conveniences changed my mind alone.

If you do it make sure its 3 totally separated areas and your tools are left in your area etc.

You also have to consider insurance etc.. Maybe one should buy/build and the rest lease/rent?
Jeep07 is offline   Reply With Quote
Old 01-08-2008, 12:19 PM   #8 (permalink)
Registered User
 
Join Date: Mar 2003
Member # 17909
Location: Richmond, VA
Posts: 484
Quote:
Originally Posted by Jeep07 View Post
Maybe one should buy/build and the rest lease/rent?
Yea, so you are the loan and then family members "forget" to pay rent or tell you they will "get you later" and it is your credit on the line....and have fun on getting family evicted out of the space for not paying their share - that will go over REAL well around the holidays...
jpcjguy is offline   Reply With Quote
Old 01-08-2008, 12:59 PM   #9 (permalink)
Registered User
 
Join Date: Apr 2002
Member # 11283
Location: Western WA
Posts: 444
The building would be 3 completely separate sections with their own entry. Boat storage, metal fab etc would be completely separate. The site I was looking at I can see from my house. I could hit a 9 iron and land it on the grass there. Yes, still makes for a PITA to get tools for house jobs. My wife owns her own business, so basically we are stuck here, like it or not.

I did just come back from the city and talked to the planner/engineer. He says since it's zoned C-1, a retail space must be on site. If my Brother-in-law were to concider thats where his business is based from, that would take care of that. However, there are other conciderations to think of, like to be out of the flood plain, we must build the land up 36" or have the building flood-proofed to 36" (how do you flood-proof a garage door?). The other concideration is that we'd need 1 handicaped parking spot that must be close to the front door and located on flat ground (might be hard if we have to build up the property). Might not work. I'll talk to them tonight, see how serious they are.

By the sounds of it, everyone thinks this is not the best idea. It really came about because if I build my 30x40 garage on my property, it will block the sun to my neighbors patio almost 100% in the summer. They are patio people, and we've known them for many, many years. His daughter was in my class, his other daughter in my sister's class (best friends), and he was my 4th grade teacher. I know it's my property and I can do with what I please, but I really don't want any bad blood.
WillisXJ is offline   Reply With Quote
Old 01-08-2008, 01:00 PM   #10 (permalink)
DUG
Registered User
 
Join Date: May 2000
Member # 858
Location: Chicago
Posts: 1,106
Send a message via AIM to DUG
Sounds like a bad dream waiting to happen; even with a contract.
__________________
Be yourself, by yourself.
DUG is offline   Reply With Quote
Old 01-08-2008, 01:52 PM   #11 (permalink)
Registered User
 
Join Date: May 2004
Member # 30432
Location: Dallas Texas Again!
Posts: 1,640
Hell family are the last I would trust. i say get the loan to do it all yourself and rent the other 2 sections to them using a contract with easy outs. Set it up so you aren't rapping the family with rent but payiing the bills... Kick thier ass to the curb when the time comes


JOSH
__________________
SHOP AND APPARTMENT FOR SALE [url]http://pirate4x4.com/forum/showthread.php?t=589523[/url]
SPEEDCRAVIN is offline   Reply With Quote
Old 01-08-2008, 01:58 PM   #12 (permalink)
Registered User
 
Join Date: Aug 2007
Member # 97010
Location: Shreveport, La.
Posts: 501
no way in hell. nobody screws you like family.
tortis is offline   Reply With Quote
Old 01-08-2008, 02:09 PM   #13 (permalink)
Registered User
 
Join Date: Dec 2001
Member # 8916
Location: KC MO
Posts: 368
Why can't you have three separate deeds for the spaces and then logically just get three separate locations which better suit your individual needs. It sounds like you are closest so likely it will fall on you to act as the night watchman when your partner's alarms goes off. Before you assume that things won't change in the future, like your's or your wife's employment, remember what making assumptions does to you and me. Hopefully it will work out.
roverjohn is offline   Reply With Quote
Old 01-08-2008, 03:45 PM   #14 (permalink)
Registered User
 
Join Date: Jun 2002
Member # 12499
Location: In a Snap-On truck tryin' to make it pay
Posts: 10,867
Quote:
Originally Posted by roverjohn View Post
Why can't you have three separate deeds for the spaces
Zoning! They would each have to be retail.

The issue with shading the patio could be a problem as the neighbor could easily argue diminution of property value and could block the building/location improvement/occupancy permit.

BTDT! If you don't satisfy all the requirements, you ain't gonna build. This is why I moved to a place with an acceptable building on-site.
PTSchram is offline   Reply With Quote
Old 01-08-2008, 04:07 PM   #15 (permalink)
Granite Guru
 
CJeep77's Avatar
 
Join Date: Dec 2003
Member # 25458
Location: Cincinnasti,OH
Posts: 585
Quote:
Originally Posted by WillisXJ View Post
I was going to build a stick built garage on my property, but my wife brought up a great point about building an off-site shop. This would give me a larger space for about the same money. I'd be going in with my sister & bro-in-law who owns a house refurbishing/insulation company he runs out of his house, and my dad and grandpa who have boats to store and work on. We'd build a 40x120 GenSteel building and divide it into 3rds giving us each a 40x40 space. The land would need to be purchased, $40k, building with shipping from CA would be about $40k, and I figure another $40k to do slab, erection (we'd be doing most) wiring etc ought to cover it. Each 1/3 would have it's own utilities hooked up.
IMHO, your estimates seem low to me....Wouldn't you need water and a shitter? Permits, water and sewer tap, 3 electric taps......I would make sure you all are in agreement with splitting the extra costs it will most likely take to get it completed once it is underway.

If you personally know all parties are responsible people, it could work out fine.
CJeep77 is offline   Reply With Quote
Old 01-08-2008, 04:09 PM   #16 (permalink)
Registered User
 
Join Date: Feb 2006
Member # 67907
Location: Cuba City Wi
Posts: 2,262
Quote:
Originally Posted by tortis View Post
no way in hell. nobody screws you like family.
Yep, I wouldnt partner up on something like this with anyone, family being the last.
It will turn into a clusterfuck.
__________________
The Beepster
[url]http://www.pirate4x4.com/forum/showthread.php?t=727456[/url]
Jeepermat is offline   Reply With Quote
Old 01-08-2008, 04:21 PM   #17 (permalink)
Registered User
 
TLCObsession's Avatar
 
Join Date: Feb 2001
Member # 3245
Location: Bellingham, WA
Posts: 1,130
One of my friends did that here in WA. They built a 6 stall pole building. They formed a company to hold the building and the land, and each stall is 1 share. They pay a monthly fee that goes to an escrow account for taxes and future repairs and improvements. The building itself is insured thru the company and each of the partners is responsible for insuring their own contents. Its only been up 4 months, but it looks like it will work well.

The partners have a buy/sell agreement as well- right of first refusal with a shotgun clause.
__________________
Never subscribe to a conspiracy theory when the stupidity theory will suffice.

Last edited by TLCObsession; 01-08-2008 at 04:22 PM.
TLCObsession is offline   Reply With Quote
Old 01-08-2008, 05:13 PM   #18 (permalink)
Registered User
 
Join Date: Jan 2004
Member # 26409
Location: Minnesota
Posts: 224
There's a lot of things you will learn about your family when money is involved.

Very few of those things will be things you wanted to learn.
jnutter is offline   Reply With Quote
Old 01-08-2008, 08:53 PM   #19 (permalink)
Registered User
 
hickfab's Avatar
 
Join Date: Jan 2005
Member # 41571
Location: In the single wide
Posts: 93
Quote:
Originally Posted by jnutter View Post
There's a lot of things you will learn about your family when money is involved.

Very few of those things will be things you wanted to learn.
Amen to that brother, familys are fine just wait until some rich parent dies then the true character comes out.


The only ship that won't sail is a partnership.

Last edited by hickfab; 01-08-2008 at 08:58 PM.
hickfab is offline   Reply With Quote
Old 01-08-2008, 09:50 PM   #20 (permalink)
Zeus of the Sluice
 
R290's Avatar
 
Join Date: Apr 2005
Member # 46467
Location: Sacramento
Posts: 4,151
Quote:
Originally Posted by WillisXJ View Post
TEdit..
I did just come back from the city and talked to the planner/engineer. He says since it's zoned C-1, a retail space must be on site. If my Brother-in-law were to concider thats where his business is based from, that would take care of that. However, there are other conciderations to think of, like to be out of the flood plain, we must build the land up 36" or have the building flood-proofed to 36" (how do you flood-proof a garage door?). The other concideration is that we'd need 1 handicaped parking spot that must be close to the front door and located on flat ground (might be hard if we have to build up the property). Might not work. I'll talk to them tonight, see how serious they are.
.
lots of fill dirt and a concrete slab with post holes going back down to grade or other engineering solutions.
handicap ramp can be used to help you with access into the building too.
it's all do able, but everyone need to going into to this with the ablity to rent out their space if needed.
__________________
73 IH Scout
R290 is offline   Reply With Quote
Old 01-09-2008, 08:17 PM   #21 (permalink)
Registered User
 
Join Date: Sep 2007
Member # 99830
Posts: 40
this will not work. Someone, or something (such as a company) will need to own the property. Considering that your brother-in-law has a refurbishing company do not put him anywhere near the title's property. If he was to go bankrupt or be sued it all could get taken away. The next problem is once you can figure out who will own the property is what happens if said person can not make the payments anymore. If you can overcome this obstacle, next it would be what happens to posession of the property if the said owner of the property becomes disabled/diseased. I have heard of many companies/partnerships going way south because of party involved became disabled/diseased and the way who inherited the said share destroyed everything (and they do have the ability to).

If you can figure out the posession of the property, then what happens to a portion of the building when one of its "tenants" becomes disabled/deceased. Will the inherited decide to rent it out? Or maybe if there is a co-ownership of the building will they sell their share? Or will they neglect it? Another question not related to these is what happens if something breaks? Maybe right now you guys can do all the work, but will you be willing to fix it if the neglect of the deadbeat inheritee caused the breakage, or if they refuse to chip in money for the repair? What if the commercial entity on site closes/bankrupts and there is no retailer on site? problems with the city?
Following the same though here what happens it one of the tenants is sued or goes bankrupt, or is accused of a crime. Typically what I would expect is that posessions are seized, and there is a chance the building could go with it depending on the titling.

I can think of many other very complex situations here. Ultimately, the best way to do this is one party purchase and own everything. This party would be responsible for maintaining the property and leasing the spaces under a contract.

My recommendation: build your shop on your property.
romoranger is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -7. The time now is 11:51 AM.


Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Search Engine Optimization by vBSEO 3.6.0 ©2011, Crawlability, Inc.