Revised-Real Estate Investment Partners
Author: Kim and Charles Petty
For real estate investors, having a partner can be very profitable. It really is a "legal relationship between two or maybe more persons associated by contract." who do business jointly.
There are many uses for partnerships in real estate business. Taking on a partner not only brings more money, and makes you bolder to invest, but also splits the risks should something go wrong. It's kind of softens the blow. It also splits the payout, but, that is fair enough, for the added benefits accrued. Possessing one set of qualifications, makes you the one to tie up with person/s having another set of qualifications in the business. If you have the money, but not the time and knowledge, there are partners/investors who have these, but not the needed money!
If you have found a suitable property that would sell well on a lease basis, but the sellers cant sell that way (they must have quick money from the sale)so you would have to shell out money or go for a mortgage for it to work for them. If you cant raise or don't have, then partner-up with someone having the cash. Half a profit is better than nothing.
Sometimes, one may have money, but have no tome to look for or take care of a property, and yet wants to invest. Here the investor with the funds will be required to pay (with reasonable interest) or acquire the homes mortgage. Both partners square off the payment of mortgage with the rental income got from the house. If the tenant or buyer exercises his option, all gains are divided or re-invested into the company.
Partnerships are not rigid and can work in any way, if a partner so desires.
Choose a partner well. A lot of good friends have ended over misunderstandings in business. A real friend shouldn't be lost over money disputes. When the money is yours, you should pick someone who is aggressive, a good record keeper, worthy of trust and with experience. If the property falls to your management, then you'll want someone who has the money, is fair, honest and willing to have confidence in you doing your part.
Legalize all partnerships. The working of the partnership, should be understood, worded out and signed before any business transactions take effect. Scrutinize your plans together; ask what partnerships goals you want to accomplish. What if so and so goes wrong? Be prepared for all eventualities. Ensure all your solutions and options are taken care of before hand. Suppose if you must take a tenant to the law. Which partners does the representation?
Companies with limited liabilities are good for partnerships. They have attorneys, who work out the agreement of operations. All partners should review this. When all alterations or corrections are made, then each one keeps a copy, after signing them.
Take an attorney's advice upon going for a partnership. Lack of communication and weak paperwork is the reason why partnerships sometimes flounder. Misunderstandings eventually ruin good partnerships.
To be successful many businessmen have multiple partners. Partnerships bring together more energy and with more energy you can do more than you can do by yourself. So go ahead and enjoy all the benefits in real estate investment?
About the author: Virtual Real Estate Investing Experts Kim and Charles Petty have been involved in over 700 real estate transactions in the last 9 years and are the creators of the Ultimate Turn Key Virtual Real Estate Investing Systems for investors all around the world who want to take advantage of the awesome profit opportunities in today's real estate market. They are the worlds leading experts on Virtual Real Estate Investing. For a FREE Special Report and Audio on how you too can make Six or Seven Figures A Year Buying and Selling Properties across the USA & abroad go to http://www.VirtualRealEstateInvestingProfits.com or call 1-800-311-9228.
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