Hi Everyone,
Just a quick Question has anyone Invested with other people such as a group of 5 people or so? Under a company name or something as im young i dont have the Capital to invest by myself and i know a few other people in the same boat so what are your thoughts on all of us starting a company together and looking for Deals in property investing. Mainly Development i would think.
This way we can leverage all our money at once with not alot of risk for each person..Cheers
Matt[biggrin]
Hi Matt,
If you want to limit the liability of individual members you will have to find either very strong development deals or purchase commercial property with a strong tennant and lease in place.
Regards
AlistairMatt,
good on you for looking at how to get started. However you end up moving forward, one thing you must do right at the start is to set up the rules of the game.
Make sure it’s well documented in a legal agreement exactly what everyone’s roles are, what they each put in and what each gets out. Specify exactly what will happen if things go well AND if things go wrong. You won’t really need this while it’s all going well, but if things go pear-shaped, you’ll all need this clearly stated, in a legally binding document.
Whether it’s a Joint Venture agreement, a company plan etc is up to you and your solicitor
, but it’s really important you have that in place before anyone actually puts any money in and before anything else is signed on behalf of the group.One other thing. Think about who’s in the group. Do you all have the same skills and shortcomings, or do you each “fill a gap” as it were. If you’ve all got the same strengths and weaknesses, you’ve not leveraging your resources nearly as much as if you compliment each other. For example, if you’ve all got no borrowing capacity, you probably won’t have a whole lot more together. But if one of you has lots of time, another has money but no time and a 3rd has heaps of knowledge and contacts, you’ve got a potentially great team.
The bottom line though is you’re making a great start. You’ve thought about it and you’ve asked for advice. Good on ya.
Cheers,
Craig.
100% of the shots I don’t make don’t go in – Wayne Gretzky
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