Hi,
I have a potential money partner who is interested in joining forces. He has access to lots of equity for loans. I am successfully finding and setting up +ve cashflow props.I thought if we went partners in a unit trust which bought props and had rent paid to my existing company and then transferred to trust.
Would i be needing a real estate agents licence to do this.?
Anyone know/have experience in partnerships of this nature.?[cowboy2]
lifexperience
lifeX, sorry, not quite sure.
On one hand, your company appears that it would be ‘managing’ the properties if it were to collect the rent, but on the other hand, they are your own properties.
Why would you not have the rent deposited directly into the trust bank account?
Cheers
MelMel, thanks for reply.
I am still feeling my way through trust types and the like. My company is currently handling all the bookwork and expenses for other props and collecting rent for existing props.
I have gone through the slow process of having accounts with each bank and registering for centrepay to automate rent payments, and was keen to somehow piggyback a potential joint venture on top of this system.
I am still going through past posts on partnerships to get as many angles as possible.[rolleyes5]
How would you structure a joint property venture?
[sunny]lifexperience
Hi there, I believe that 1hotvaluer also has a partner, could be similar situation. I recall her mentioning that this has worked well for her, you may like to PM her. Cheers
Hi LifeX
I believe it’s a great idea if done correctly, the principles are great.. as long as no problems occur ( as they occasionaly do )
From memory SPODGE posted on Unit Trusts and is involved in such, speak to your accountant re Structure
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi lifeX
If you currently have the setup where your company collects rent (as long as that’s all above board – not sure about re licences required etc.) then there shouldn’t be a problem piggy backing your joint venture onto it.
I guess I was thinking more along the lines of you having a PM looking after the place, then depositing the money in your company account, then you transferring the money to the trust. If that’s not the case, then it sounds fine.
I would definitely structure a JV as a unit trust (have just done so for latest purchase).
Cheers
MelAlso look at having only one trustee. This could enhance borrowing capacity (especially in the use of low doc loans) and limit risk. You could have two trusts, one person a trustee of each.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for guidance all,
Mel, how did you set up the last JV you mention. Did you see a lawyer to write partnership agreement.
Terry,
Are you suggesting the idea of having 1/2 the property in each trust. ??????
Please explain who appointers, trustees and which trust would own props.This is the model i was thinking.
TENANTS RENT
V
V
V
MY EXISTING COMPANY
V
V
V
RENT
V
V
V
UNIT TRUST owns property >>>>>>>>>>>>
….V………………. ……………..V
MY NEW FAMILY TRUST ……………MY PARTNERS NEW FAMILY TRUST
V ……………………………………V
ME ………………………………. PARTNERCan ayone suggest flaws in this? Or who would be trustee, appointers etc.
Thankya all[sunny]
lifexperience
lifeX, don’t quite understand your model – bit hard to align stuff on these boards[confused2]
I think I understand what you’re saying (hope).
You will set up a unit trust, with the shares owned by your family trust, and your friend’s family trust (or however he decides to do it).
The trust will buy a house. The company will rent the house from the trust (using a head lease so it can sublease)? And then will rent it to somebody else? That could work….
With your JV and a unit trust, you’ll have a trust deed, which specified who controls, how shares can be sold/transferred etc. If you choose to have another agreement outside of this you can – I didn’t – and you would probably specify things like the length of the partnership, how long things were to be held, exit strategies etc. etc. Totally up to you.
You and/or your friend could be trustee (or have a company that is trustee which either/both are directors of). Not sure on appointor for Unit trust – my solicitor told me that the decision had to be made by the unit holders (a 51% vote or something).
Cheers
MelLifeX
To make your borrowing power stretch further, consider having one trustee per trust. So you buy the property fully in trust A, you partner then buys another property in Trust B, you both can be beneficiaries of each trust, could be a unit trust with units owned by each of your discretionary trust. This way only one of you would be guarranteeing each property. You could probably both be appointers for each trust, but check this with a professional.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks terry, mel and others. Great ideas
Plans are on hold til after financial year. I will keep you posted on what we do.lifexperience
LifeX,
You don’t need a RE licence to do this.
You’re no different from any other investor controlling you own property.
But… how will your partner be protected in getting his share of the rent if it goes through your comapny first.(except by you goodwill and honesty ?) Seems the risk is on him from where I sit…KP
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