Tuesday, October 1, 2013

Money Partner Wanted!

Just what exactly is a "money partner?"

Many real estate investors like myself use money partners to help them purchase, renovate, re-sell and profit on income-producing real estate. Typically these are set up as joint ventures between the money partner and the investor, where either the money partner or both provide the funds to purchase, fix-up and market the property. Both are listed on title as co-owners.

A typical investment strategy for the acquisition of a portfolio of cash flow rental properties might be to buy and hold for the next 5-7 years and then cash out. A 50%-50% joint venture will include the benefit of appreciation of value, pay down of mortgage, monthly cash flow, and tax benefits.

Typically, the more experienced investor will personally perform locating, negotiating, acquiring, and managing the properties, including setting up LLC agreements, ensuring both federal and state compliance, and preparing monthly financial statements for performance analysis (subject to partner's approval).

SEC and state regulations may apply to these kinds of equity partnerships, so be sure to obtain legal advice from your attorney to proceed.

Happy investing!

No comments: