Hi guys,
So I am looking for a bit of advice/thoughts on an opportunity I am contemplating.
I am thinking of engaging in a partnership with business relation/mate that would look like this:
- we purchase a property on a large block
- get all approvals
- subdivide
- demolish and rebuild 4 townhouses
- sell 2, keep 1 each, in our own name
- exit
- repeat if successful
The goal of the partnership would be to combine our resources to tackle a large project that neither of us can take on his own. He also has contacts for all the tradies, which will help keep the costs under control.
We are on the same page regarding guidelines: 50/50 cost initial cost injection, and 50/50 split of everything else we encounter.
Clear exit strategy: we buy, develop, sell and split. Then each is free to do as he please with his property. No co-ownership long term hold & conflicting regarding whether to sell or hold and whatnot.
I have basically been looking at what type of structure could be put in place to protect both of us. I have done an extensive search on the forum and found several possibilities:
- partnership of individuals
- Joint venture
- trust
- partnership of trust
I have been trying to get a better understanding of the differences and benefits but it's pretty complex. I guess one of the main feature would be the limitation of the liability of each member to the extent of the project only. But my understanding is that personal guarantees are required all along the way...so might not be simple at all.
From what I have read, it is all a big mess and it's much better to do it alone!
I am not opposed to the idea, but lack experience in this area ( I would not know where to start) and also lack the time. In this respect the partnership would prove a very useful guide that could also help me build skills along the way.
Any thoughts and suggestions would be greatly appreciated!
It's only something I have been considering for now and I see the opportunities but also the possible downfalls.
So I am looking for a bit of advice/thoughts on an opportunity I am contemplating.
I am thinking of engaging in a partnership with business relation/mate that would look like this:
- we purchase a property on a large block
- get all approvals
- subdivide
- demolish and rebuild 4 townhouses
- sell 2, keep 1 each, in our own name
- exit
- repeat if successful
The goal of the partnership would be to combine our resources to tackle a large project that neither of us can take on his own. He also has contacts for all the tradies, which will help keep the costs under control.
We are on the same page regarding guidelines: 50/50 cost initial cost injection, and 50/50 split of everything else we encounter.
Clear exit strategy: we buy, develop, sell and split. Then each is free to do as he please with his property. No co-ownership long term hold & conflicting regarding whether to sell or hold and whatnot.
I have basically been looking at what type of structure could be put in place to protect both of us. I have done an extensive search on the forum and found several possibilities:
- partnership of individuals
- Joint venture
- trust
- partnership of trust
I have been trying to get a better understanding of the differences and benefits but it's pretty complex. I guess one of the main feature would be the limitation of the liability of each member to the extent of the project only. But my understanding is that personal guarantees are required all along the way...so might not be simple at all.
From what I have read, it is all a big mess and it's much better to do it alone!
I am not opposed to the idea, but lack experience in this area ( I would not know where to start) and also lack the time. In this respect the partnership would prove a very useful guide that could also help me build skills along the way.
Any thoughts and suggestions would be greatly appreciated!
It's only something I have been considering for now and I see the opportunities but also the possible downfalls.
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