Joint Venture Advice

[marianne]

I have met a couple I am very comfortable with and would like to put the downpayment
on a house with them. Can anyone who has joint ventured give me some senarios as to
what you would or wouldn`t do. It`s a $475,000 house which 10% down would cost me
about $270/mo. financed on my line of credit. It seems I would have to ask them to take on all the financial responsibility, including repairs and maintenance, in order for this to make sense. Is that reasonable? I could put 20% down on a $375,000 house and have it cost me around $375/mo. plus maintenance and repairs but get all 100% of the appreciation and mortgage paydown. How can I make a JV situation an equally profitable investment as going it on my own? I realise it would be less headache than dealing with a "rental" but is that really worth giving up 50%. Then again I have more money available to invest elsewhere. What am I missing? Any thoughts or points would be greatly appreciated!!

 

[RedlineBrett]

Well in any partnership each side has to being something to the table which the other side needs. They need your money but what do you need from them?

If you are ok being the investor/worker/manager and keeping 100% of the deal then obviously you`re going to need a better offering than someone that has no concept or desire to do any work whatsoever and just wants to write a cheque.

No right or wrong answer for you - what do you think will get you the best return on your $? 50%/60%/70% of the deal you could do with this couple or 100% (minus your time and headspace) of a deal you do yourself? Are you confident in your real estate ability to get and manage an appropriately leveraged investment and not have it take away from other parts of your life?

What are your other options? Other JV`s elsewhere? Stocks, Bonds, stick it under a mattress? I would weigh your three options and prioritize them according to your preference. From that you will see what you would need to have from your JV partner to have a deal with them be a winner for you. Then offer them the chance to do that and if it`s not good enough for them proceed with one of your other options!

Best of luck,

BT

QUOTE (marianne @ Mar 26 2008, 10:30 AM) I have met a couple I am very comfortable with and would like to put the downpayment
on a house with them. Can anyone who has joint ventured give me some senarios as to
what you would or wouldn`t do. It`s a $475,000 house which 10% down would cost me
about $270/mo. financed on my line of credit. It seems I would have to ask them to take on all the financial responsibility, including repairs and maintenance, in order for this to make sense. Is that reasonable? I could put 20% down on a $375,000 house and have it cost me around $375/mo. plus maintenance and repairs but get all 100% of the appreciation and mortgage paydown. How can I make a JV situation an equally profitable investment as going it on my own? I realise it would be less headache than dealing with a "rental" but is that really worth giving up 50%. Then again I have more money available to invest elsewhere. What am I missing? Any thoughts or points would be greatly appreciated!!

 

[KimFranz]

My first investment property was a JV where I put up the money. Decide first - what can you afford? Then go back to your potential partner, let them know what you are comfortable with, then decide on what would be fair for both of you. Make sure that when all is said and done that you will be able to sleep at night, and your partner too!!

Kim

 

[Nir]

Sorry if it sounds cold but if you have the option to purchase it alone financially (sounds like you do) and you have the knowledge to do it or at least the couple`s knowledge level (sounds like you do), then BUY it alone! you are not "ready" for JV yet which is actually good news for you.

Cheers,
Neil

 

[Thomas Beyer]

partner ONLY if you have to !!

It appears you do NOT have to .. so if you can go it alone .. go it alone !

RE investing takes time, expertise and money .. and YOU have to assess if you can invest all 3 (or have all 3) .. so IF you have teh time and the knowledge then why partner ?



If you lack the skills or don`t want to invest the (sometimes substantial) time, then of course consider a JV with them or a number of other firms or people !!

 

[JBagorio]

I truly agree with venturing out on your own to start with and gain the experience you’ll need in preparation to partnering with anybody. JV is a beast on its own and there are lots of things you’ll need to factor. It is like finding the person you will need and perfect for you to marry. It is like a handshake that will complements both parties.

I see JV as the next step or option you can take to expand. To find a partner that will add value and experience to the plate uncommon to what you already have.

 

[marianne]

Thanks Guys and Gals!

I am still stuggling with this one, but all the input is really helping me to see all
the different angles of the same picture.

Thanks REIN members and friends!!
Marianne