QUOTE (albainstar @ Jan 16 2008, 12:38 PM) ... I am running un understaffed busy store in Fort Mcand flying in and out of another town is just not really a viable option for me, ecxept perhaps once per month.
Thus the reason I havent joined REIN, and other than that how do I meet, and more importantly know if I can trust a JV partner?
TWO parties exists in a JV: the guy or team who WORKS .. and the guy with MONEY ! Often the profits are split 50/50, but that is not a rule.
REIN exists to help guys who wish to WORK the deal .. as it is a lot of work .. see list below ..
You trust people by checking their track record .. or phone references .. or interview them .. but track record is best ..
What does the WORKER or REAL ESTATE TEAM DO:
ü Investigates location / area of North America to invest in (recently we bought in Powell River on BC’s Sunshine Coast due to low prices and expected upside due to baby boomers retiring – we’re also buying in Saskatchewan and Texas right now)
ü Investigates location once city or metroplex is selected (we like “B” areas where value can be created fast .. as opposed to “A” locations that are often too pricey or “C” locations where rent increases are tough to realize due to bad tenant profiles and management problems)
ü Screens / filters potential investment properties using realistic rents and/or expenses
ü Writes offer on selected property (this may involve multiple offers and multiple iterations since typically not all offers will be accepted)
ü Negotiates terms and conditions of offer
ü Finalizes offer
ü Sets up the legal structure / corporation, and co-investor structure usually via a joint venture or limited partnership agreement
ü Selects property manager, onsite manager and other professionals (such as tax advisors, inspectors, appraisers, bankers, engineers, roof experts, boiler mechanics) that may be required to inspect the property initially and operate the property on a day-to-day basis
ü Will market, rent, fix up, repair, paint, landscape and/or enhance said property to standards that expert sees fit to achieve appropriate rent and/or resale value
ü Will keep a record of such fixtures, repair material and/or landscaping material expenditures and/or of all other expenses, such as property management fees, sub-contractors, onsite managers, taxes, insurance, realtor, legal, advertising and/or related expenses to market, upgrade, rent and later sell said property
ü Sets up WCB, contractor, Rona, Home Depot or supplier accounts
ü Negotiates and sets up preferred vendor, supplier and contractor list
ü Negotiates with financial institution to obtain, initially and/or later, re-finance using 1[sup]st, 2[sup]nd[/sup] and/or CMHC or FannieMae insured mortgages
ü Manages all relationships with banks, realtors and/or 3rd[/sup] parties
ü Sets up reporting and e-payment mechanism to investor
ü Acts as the primary interface to property manager, or may manage properties in-house
ü Adjusts rents frequently with market realities
ü Invests frequently (but not always) personally into the venture
ü Signs all necessary legal documents
ü Files annual or quarterly statements / documents that may be required by various jurisdictions
ü Signs required personal guarantees for required mortgage(s)