Forum Replies Created
Cheers Mattsta. Yeah they do have a Bunnings which will help for materials like paint, concrete, grout etc. I'm hoping they might have something that sells building materials that have been ripped out of renos/demolitions.. i'll keep researching.
Cheers Terry.
Hi Terry,
Thanks for your info.
The way I see it is the partner has money but no experience and wants to get into the market and I have experience (albeit not a huge amount), so I see it that we can help each other out. Again I guess the issue which I raised earlier is what price does ones experience equate to?
You mention a unit trust. Is this because it would protect both of our assets should things go wrong?
Surely there must be a way for this to work for both parties? It does seem like it would be hard to implement but surely its possible?
Thanks Terry & Paul,
I've re-assessed the situation and after more research on JV's, I think I like the idea of the Buy/Reno/Sell strategy. We then sell and split profits. Obviously CGT is not an ideal situation but I guess its our or my task to make sure the whole project is worth our while taking this into account.
My basic breakdown for the JV would be:
* Investor to fund purchase & renovation of properties
* Me to source the property and project manage the renovations
* We sell and split the profits 70/30 ( my way… ha ha.. just joking I wish)Do you think this could work? I'm happy with this.
Just wondering how we would go about formalising this? Obviously we need a JV set up but a Property Specialist Solicitor, but do we need to set up a Unit trust? I assume they will know the other variables that would need to be taken into account ?
Cheers,
Harry
Hi Paul,
Thanks for your info. I understand how that structure would work. The other important point to raise which I forgot to make clear in initial post is that the investor would be looking to pay for the entire process… ie 100% cash for property and 100% cash for renos (it should be noted investor is not in the mafia.. these are lower priced houses). I understand this is not the best investing strategy, but he wants to avoid financing.
So I guess in this situation we're trying to work out what percentage share our services are worth in the deal. Ie if we source the property, facilitate the reno and ideally increase the equity then what is this worth in terms of % share in the home? Do we charge a management fee for the process and take a 20 or 30% share? or less? And cashflow (rent) is returned to the investor as theirs no mortgage to be paid?
Of course a property specialist solictor would need to put together an agreement covering us all.
cheers,
Harry
