{"id":13968,"date":"2019-10-24T15:15:01","date_gmt":"2019-10-24T22:15:01","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=13968"},"modified":"2019-10-17T10:33:29","modified_gmt":"2019-10-17T17:33:29","slug":"real-estate-investing-partnership-options-considerations","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/10\/real-estate-investing-partnership-options-considerations\/","title":{"rendered":"Real Estate Investing Partnership Options &#038; Considerations"},"content":{"rendered":"<p style=\"text-align: justify;\">As an investor, there are many ways to partner with others to put together deals and increase profits. The key components of any real estate investment are the seller, the buyer (investor), the property, the source of funds, and when you are flipping, the end buyer. As the buyer\/investor, your role is pulling all of these resources together into a specific deal. However, you don\u2019t have to do that all by yourself. Formal and informal partnerships can leverage your investment business.<\/p>\n<p style=\"text-align: justify;\"><strong>Basic Partnership Considerations<\/strong><\/p>\n<p style=\"text-align: justify;\">Real estate investment partnerships can be very complex or very simple. One of the simplest ones is an interest only loan. As an investor, you bring in a funding partner by agreeing to an interest rate, the length of the loan, and the security (usually a first mortgage on the property). Outside funding could come from your own network if you have a history of successful investments. However, you have many other sources worth considering. The home mortgage industry has evolved to include an almost endless source of funding. A little searching on your part will reveal everything from crowdfunding, to hard money lenders, to individuals investing their 401k retirement accounts. Some are silent partners and others want a more active role.<\/p>\n<p style=\"text-align: justify;\">A more complicated funding partnership can be a profit sharing arrangement. Writing a contract for a profit sharing arrangement has many variables. You may chose to write up a contract for a single property that details the specifics about how the profits will be shared. Or you could enter into a Limited Liability Company that oversees multiple investment properties and again details how the profits will be shared.<\/p>\n<p style=\"text-align: justify;\">Partnerships certainly don\u2019t have to be 50-50 split. If, as the primary investor, you\u2019re doing most of the legwork, you\u2019re entitled to a higher percentage of the profits. You\u2019re doing all of the research to find discounted properties, negotiating the sales terms, overseeing the remodeling, and finding an end buyer. You may even be putting down earnest money and\/or providing part of the purchase money. Under some or all of these scenarios, you\u2019d certainly be entitled to a higher percentage of the profits.<\/p>\n<p style=\"text-align: justify;\"><strong>Advantages to Bringing In a Partner<\/strong><\/p>\n<p style=\"text-align: justify;\">Reasons why you want a partner :<br \/>\n\u25fe To bring other people\u2019s \u2018skin into the deal\u2019 to lower your business risk.<br \/>\n\u25fe Enables you to spread your own resources across more deals to increase overall profits.<br \/>\n\u25fe Enables you to finance and complete more complex and more expensive deals with higher profit margins.<br \/>\n\u25fe Brings in experienced people to share their knowledge and ideas.<br \/>\n\u25fe Increase your success and shares it with others.<\/p>\n<p style=\"text-align: justify;\">Issues to be concerned about :<br \/>\n\u25fe Clearly detailing agreements about how profits or interest will be paid.<br \/>\n\u25fe Not giving up too much control of the deals.<br \/>\n\u25fe Be cognizant of extra reporting requirements, especially tax related.<br \/>\n\u25fe New partners with different investing strategies and goals that you don\u2019t share.<\/p>\n<p style=\"text-align: justify;\">Good times to consider partners :<br \/>\n\u25fe When a partnership takes both businesses to the next level (such as new networking sources or moving up from single-family homes to small apartment buildings).<br \/>\n\u25fe When combined portfolios will look better to outside funding sources.<br \/>\n\u25fe Before you start looking for your next investment property.<br \/>\n\u25fe When a partner strengthens your weaknesses and you do the same for him or her.<br \/>\n\u25fe When partnering is more attractive than other financing options.<br \/>\n\u25fe As a method to reduce the cost of leveraging your own money.<br \/>\n\u25fe As a way to boost the confidence of future investors for bigger deals.<br \/>\n\u25fe When you have potential investors who want another partner in the deal.<br \/>\n\u25feWhen you\u2019re already in multiple deals and are short on cash but another great deal comes along.<br \/>\n\u25feWhen taking on a new creative investment deal that your partner has more experience with.<\/p>\n<p style=\"text-align: justify;\">The most common problem that comes with partnering on real estate deals are the legal aspects. It\u2019s highly recommended that you check out the credentials of new investors as much as they check out yours. Also, have a tightly written contract, partnership agreement, or LLC agreement and attach it to the title of the property to prevent a money partner from taking out another mortgage or selling the property out from under you. Both partners need to be prepared to revise agreements as the partnership matures and new experiences are encountered.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/realtybiznews.com\/real-estate-investing-partnership-options-and-considerations\/98756169\/\" target=\"_blank\" rel=\"noopener noreferrer\">Real Estate Investing Partnership Options &amp; Considerations<\/a> by Brian Kline | Realty Biz News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As an investor, there are many ways to partner with others to put together deals and increase profits. The key components of any real estate investment are the seller, the &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/10\/real-estate-investing-partnership-options-considerations\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-13968","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Real Estate Investing Partnership Options &amp; Considerations &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/10\/real-estate-investing-partnership-options-considerations\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Real Estate Investing Partnership Options &amp; Considerations &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"As an investor, there are many ways to partner with others to put together deals and increase profits. 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