Hey all,
I am thinking of combining mine and a friend’s forces to form a property partnership. However, we don’t really know wot type of partnership to form just yet. My friend will be contributing a majority of the capital but i will be the one doing the majority of the deals and research.
We want to purchase our first property with the strategy of using it as a line of credit as we will be doing many wraps in the future. It seems like the way to go as wraps them selves, as i have been told, are difficult to establish a line of credit with.
On Friday we are going to approach a bank/mortgage market to find out how much we can borrow according to our individual incomes. However, as a partnership is it seen as a completely different ball game? What type of partnership would u suggest and do banks look at them much differently then say a married couple?
Should we see a bank with a hypothetical situation or approach a solicitor first?
We just want to see whether it is a feasible approach to fast track our investment journey
Thanx again!!
P.S
I know Steve started out in the same kinda way, wot would u suggest i do Steve?
U can’t predict the future but one can prepare themself for it!!Hey Harryson,
I am currently exploring the same thing and I have talked to a few people and my first suggestion is to do the same. Check out the implications with your accountant and your solicitor. Be specific about your needs and aims and put it to the experts.
The options as I understand it are;1. Partnership.
2. Joint Venture.
3. Company.
4. Unit Trust.All of these have pro’s and cons and you need to find out all about them for your situation.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=707
This link also has a little more.
Hope this helps.
Enjoy
AD [:0)]“Enjoy life. There’s plenty of time to be dead.”
-Anon.I realise you’re asking from a largely structural and borrowing-power point of view, but from someone who has been in a business partnership gone bad:
1. Put everything in writing before you begin, nomatter how much you trust them. This isn’t just so you’re legally protected, but also so both of you understand exactly which angle each person is coming from. After doing this, then write down your understanding of what the other person expects to make sure you’ve interpreted it correctly. Don’t skip this step (which I did), don’t just jot down a couple of things – do it properly, sign it, and review it regularly.
2. It’s very hard to maintain a business partnership and a friendship, but not impossible. Keep them completely separate. Even if you trust the other person completely, it doesn’t mean the business side of things is going to work out. A few years down the track the friendship will be even stronger if you do it this way.
3. Never, ever lie about anything to your business partner. Ever. Don’t exaggerate, don’t go behind their back, don’t be disloyal – be upfront about EVERYTHING. If things are looking shaky, speak up early and try to work it out. If it’s not working out, cut the business relationship immediately and save the friendship. You can still help each other grow as people (financially and otherwise) without being completely involved in each other’s deals.
I could go on for hours, but I won’t. My former business partner and I still have a friendship, and money itself has never been a trust issue (we still have complete trust in each other in this regard), but a great deal of damage was done to an extremely valuable friendship because one party didn’t speak up when they weren’t happy with things and we had unrealistic expectations of each other at the start.
Please keep this in mind, it took me 2 years of some very difficult learning experiences to understand all of this.
Regards,
Marcus.
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