All Topics / Help Needed! / Money Partners
Hey everyone
I’m contemplating putting the feelers out for money partners for property investing. I’m finishing my job to focus on Property Investing, taking up a part time job, so my access to a mortgage is going to be slightly limited.
How do these arrangements usually work? Is it normal for one person to put up all the capital, while the other spends the time sourcing good deals?
I have a couple of friends who may be interested in contributing capital, but what terms should be negotiated? Do I give them a certain return for their investment? Do I agree to spilt profits at the end?
Any thoughts would be greatly appreciated…
Can nobody help me out here?? Any examples of partnerships that have worked and on what terms would be great…
Not all at once now… [tongue]
I’d talk to them about your plans and strategies and ask your friends “so what sort of return do you want for your money?” make them give a figure so they are happy. Maybe 15-25% would be good range, really depends on what you are doing and what you afford to give away.
Don’t profit share, if you are the expert on the project take full control and make the decisions, you don’t want interference from the investor so make sure the contracts are in place to distiguish all this.
Best of luck
ChrisI read one piece of advice re business partners, that the guy I was working for at the time should have read b4 acquiring his new partner was:
” treat a partnership as a marriage, or keep it at arms length”
A solicitor I worked for said it is very rare for any sort of partnership to work especially between family members & or friends. He made a lot of money cleaning up the mess.
I have been giving it a lot of thought, I am thinking an investment type arrangement with a flat % for monies invested. something along the lines that Motgage brokers use.
Celeste
I read one piece of advice re business partners, that the guy I was working for at the time should have read b4 acquiring his new partner was:
” treat a partnership as a marriage, or keep it at arms length”
A solicitor I worked for said it is very rare for any sort of partnership to work especially between family members & or friends. He made a lot of money cleaning up the mess.
I have been giving it a lot of thought, I am thinking an investment type arrangement with a flat % for monies invested. something along the lines that Motgage brokers use.
Celeste
I’ve been involved wiht a few partnerships involving property, and have seen a few clients too. They generally don’t work out very well.
To avoid problems, it is best to have everything documented at the start. Think of all the possible things that can go wrong, and work out a solution before it happens.
Look through these posts, there was one a few weeks ago about a guy getting sued by his partner in a property investment.
Maybe a better way would be for you just to borrow money from your partner for the deposit, and get the loan and title in your name only. Pay a fixed interest rate (eg. 15% seems common) and that keeps them out of the deal, so it is easier to control. After you get some equity, you can increase your loan, and pay them back – then maybe borrow again for the next one.
Terryw
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Thanks for the advice guys. Sounds like partnerships can be a bit risky if not managed properly. I’ll definately keep this all in mind.
Appreciate the feedback…
you need to have a plan, in place at the start of the project, like all successful business deals.. Im now looking for apartner with 100k for 12 months on 20 percent payout at the end of twelve months. If there is anyone interested email me melbplumma at hotmail.com
or any thoughts or experiences from people who have done this before.. thanks[biggrin]
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