How do we establish equity partners?

My husband and I have been in the property investing game for several years but are still struggling to gain momentum. Over the years, I have kept up to date with what is happening around the country, often picking ‘hotspots’ before they boom, but never being in a financial position to do anything about it. Four years ago, we were planning to buy property in Perth, but it didn’t eventuate. Grrrrr…… [angry2]

We currently have 3 investment properties (all negatively geared) and are in the process of selling one (it was a ‘knock-down / rebuild’ project that we had planned to on-sell) to ease the crippling financial burden we have been under over the last couple of years and to allow us to move forward with our property investing. When we bought the knock-down property 2.5 years ago, we based our calculations on a selling price in the early to mid $600K range. In the week before Xmas, we received an offer of $710K, a week after the property went on the market.

We have identified several development opportunities in our region involving knocking down dumps and building new houses or duplexes. The most enticing project involves a waterfront property selling for $600K. There is a weekender on the block which we would knock down and replace with a duplex at around $600K. The total outlay would therefore be around $1.2 million. Based on property values for much older homes in the area, we would expect around $900 K for each duplex unit, resulting in a gross profit of $600K, less interest, etc.

Once the sale of our IP goes thru’, we would be able to borrow around $550K – not enough to pursue the project on our own. Approaching family members is out of the question, as is asking friends (we were burnt by a couple of friends a few years ago on a property investment).

Where do we find equity partners? Has anyone else tackled (and conquered) this problem?

Anne.