Partnerships

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redwing
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@redwing
Join Date: 2003
Post Count: 2,733
February 29, 2004 - 6:34 pm
Just a post re Partnerships..
A friend at work knowing my interest in property queried partnerships..
How would you structure such a think, assuming 2-5 people ??
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Mortgage Hunter
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@mortgage-hunter
Join Date: 2003
Post Count: 3,781
February 29, 2004 - 11:53 pm
If they need to use the property as s ecurity then they all need to be on the loan.
The main problem is they will all be individually responsible for the whole debt.
Better if they can all raise the fifth share on other properties and pay cash for the JV.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
FYI
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@fyi
Join Date: 2004
Post Count: 27
March 2, 2004 - 6:29 am
Further to Simon’s comments, you can imagine the potential problems if one of the parties gets into some sort of financial difficulty and ‘wants out’.
All parties to the loan also reduce their own individual borrowing capacities.
Matt Anderson
[email protected]
Still in School
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@still-in-school
Join Date: 2003
Post Count: 1,844
March 2, 2004 - 6:48 am
another thing to be careful about partnerships, if the loan defaults, the creditors, will take repossesion of assets from the partner who has the most asset or cash availabe… just be wary as partnerships offer unlimited liablity, even if your share of the ownership is 20% and the other partners have greater share, you can still be liable for all.
also be careful with JVs, as their normally a one off enterprise, but in business law, a JV maybe drawn up, but can still be recongnised as a partnership.
you might be, better off, setting up a Unit trust for a particular deal like this, if there is going to be quite a few people involve.
Cheers,
sis
People 4get that by saving just $3 a day & investing it sensibly
over a working life, you’ll end up with around $1 million
redwing
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@redwing
Join Date: 2003
Post Count: 2,733
March 2, 2004 - 6:41 pm
Unit Trust..
Hmm have to speak to accountant.. Thanks S.I.S, although it’s just an idea tossing around at the moment, i can see it’s benefits, and appreciate any posts of hazards of such a venture also, thanks
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”