Partnerships to buy high yielding property deals

[internext]

I'm thinking the best way to accelerate is really to do partnerships with other people in finding and managing good deals. The reason is that I don't really have the time to focus on property because of my main business. But I do have over $2 million to invest in property, and thinking to do it via partnerships. Let me know your thoughts, if you think this is a smart or a poor approach (obviously depends on who I would be partnering with!)

I'll give you one example, there is a guy in Florida who is buying single family homes very cheap (like $50,000), renovating, and then renting them out per room, and so is able to get 20% net returns (40% gross approximately)

Also doing a partnership in New Zealand, but not in Australia yet.

 

[Propertunity]

A couple of Qs for you:
1. What will you be bringing to the partnership table? Is it just the $2M?
2. What are you looking for in the other partners? Is it their ability to do renos? Find tenants? Property selection? Put in some of their own cash? or mortgage? etc
3. What kind of entity would you seek to be using?
4. What would your "exit strategy" be?

e.g. If it is just property selection you are after then maybe hire a BA?
This would avoid all the "jointly & severally liable" issues you would have if co-sigining mortgages (if indeed you need mortgages).

 

[grossreal]

hi
I have a couple of questions for you and if you can put it down in points would be good
1. you are wishing to buy where ie aust or the us or tonga you need to indicat an area or a region
2. are you looking at being a silent partner or an active
3 is the 2 mil in cash or equity
4 what experience have you had in investing in a group or syndicate
5 we are not allowed to talk about syndicates so I am asking these questions as a hypo questions
6. what are your goals long term 10 years longer medium 5 years or under short flick when market turns if you wish to get into a group then you have to be with like minded people
7.are you male or female some are male only, some are female only
8.what do you like to invest in comm, resi,businesses, hotels, resorts or pubs
9.are you investing as yourself,a company, a smsf, what structure or entity are you looking at investing in
10 this entity where will it be based and under what tax structure are you looking at using.
is this all the questions
no this is about 10% of the question that you will be asked before even being asked to join a group and the 2 mil is not a large amount compared to some when you wish to invest in a group you have to see if the group wishes to invest with you.
oh and everyone bring things to the table that they maynot know they have yet until the groups find some thing they don't know they have.
hope you well
and for those interested in any form of grouping you need to understand where or how to the above before you start to think to get into group buying.
you can email me if you wish or pm me I only come back every so often
bit busy

 

[Lofty]

Hi internext

It may be worth your while looking into a joint venture with a vendor financier. Our experience has shown good returns and the properties are in Australia.

Cheers, Paul

 

[internext]

Hello. To answer some of your questions above:

I can bring to the table also people to help with research accounting, other skills that are needed that can be performed remotely (I have a team of around 50 people and can use these staff for this project). Specifically for example I could have a person full time researching deals (making calls, or working online) and could pay the salary of this person. I don't have anyone on the ground.

Entity to use would depend on the deal but in the US an LLC likely, in Australia I'm not sure probably a trust. I don't think the entity matters too much, I'll just create whatever entity is needed.

I'm more interested where I have a partner who puts in the cash, for example something along these lines:

$500k cash is needed, I put in 400k, partner puts in 100k.
The cash gets a 10% preferred return per annum.
After the preferred return we split profits 50/50.
This is the exact deal I am doing with current partners, with the numbers varying a bit.

Region to buy: wherever has the rule of law and good returns. I'm a bit concerned about buying residential in Australia in general as property yields are quite low, but there are opportunities in all places.

I'm looking to be a silent partner basically, but as mentioned am open to having full time staff working on the phones or remotely on the deal.

I'm looking at longer term investments for example 7-10 years, but there needs to be an agreed exit point by probably this point. I'm open to shorter term deals as well (development deals and flips).

Past experience, I'm currently doing some joint ventures to buy residential real estate in the US, but nothing in Australia.

I'm open to all types of real estate but in commercial, resorts or pubs would be looking for much higher potential returns and would not be actively operating the investment, so would need someone with experience in the area.

Thanks, lots of questions!