All Topics / The Treasure Chest / Property investing with the In-Laws?

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  • Profile photo of Simon2Simon2
    Member
    @simon2
    Join Date: 2002
    Post Count: 5
    September 13, 2003 - 1:44 am

    G’day everyone.
    I am seeking advice over investing in real estate with other partners. My wife and I have been planning to buy our first investment property after already buying our home and acquiring some sizeable equity. The In-Laws have also expressed interest in investing alongside us in a joint name venture.
    They may or may not have a deposit, depending if they can use the equity in their home and would probably rely on us to find finance. We want to see them prosper as well as our selves. Can you tell me how banks would react to this strategy? Would it hamper our ability to reinvest?[8D]

    Profile photo of richmondrichmond
    Participant
    @richmond
    Join Date: 2003
    Post Count: 831
    September 13, 2003 - 1:50 am

    Hi

    My fiance has raised the prospect of going into IPs with family (both mine and hers), but I steered her clear of it, not through greed or anything, but just practicality, because I personally reckon it’s fraught with potential problems.

    You have to be 100% certain they share the same goals, ambitions etc. Make sure you have exit strategies worked out, ie, what if you buy a place with a view to holding it for 10 years, then after 5, the in-laws want to get out of it and take their cut? Even though you think it might not be a problem now, you should think of stuff like that which could emerge and have plans in place to deal with them.

    Cheers
    r

    Profile photo of SaskatoonSaskatoon
    Participant
    @saskatoon
    Join Date: 2002
    Post Count: 112
    September 13, 2003 - 7:52 am

    quote:

    G’day everyone.
    I am seeking advice over investing in real estate with other partners…

    Hi Simon.
    There have been discussions about this before.
    Most people on the forum suggest that you do not involve family as it causes heartaches if things don’t appear to be going well for one or other of the investing partners.
    If you want to do this, look to establish a unit trust and have everything in written agreements e.g. who makes the decisions, what happens if anyone wants out, disputes about course of action, what about divorce & property settlements, etc.!
    Do lots of research on this and other forums.
    I believe it can work well if you set up correctly.
    Terry

    Terence McMahon
    HomeWin
    Finance

    Profile photo of Simon2Simon2
    Member
    @simon2
    Join Date: 2002
    Post Count: 5
    September 17, 2003 - 4:12 am

    Thanks to those who replied. The next step is for us is to talk to a mortgage broker.[8D]

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