Forming an investment group
Recently I talked about joining forces with another person to help you out if you were having difficulties in paying for your mortgage commitments.
Purchasing real estate with other people can be a very good idea, especially with the economic climate as it is at present. 
For example, if two friends decided to purchase together, or two couples decided to purchase, the best thing is to not rush in and go buying then worrying about the consequences at a later stage.
Firstly, talk it through and see if you can agree on the basics of owning property together and there are a number of things to consider:
• Should you all live in the property and risk a falling out
• Should one particular couple live there and the other not
• How much money is being put up by each couple
• How much money from each couple is going to be paid for overheads
• Who is going to deal with whom – in other words a delegation of duties could stop a lot of problems
• What is the criteria for purchasing – size, location, bedrooms, family rooms, garaging, pool, near schools, etc
• If for some reason one couple has to be bought out how will that be negotiated and who will pay the expenses
• Should any ownership be set up as two couples or should it be 4 individuals – it will be four in reality, but what if a couple splits
Is there going to be a bank account with sufficient funds in, to cover any unexpected payments like an accident at the property meaning urgent repairs, or in fact any other larger expense, like say, a new stove.
I think you will see the picture. Financially it is a good idea to pool resources, but check with accountants and the like, and make sure that all the t’s are crossed and the i’s dotted on an agreement before signing any paperwork to purchase.
The banks are tending to like this type of investing because it is not leaving them as exposed to the earnings of one owner.
Get the paperwork right, insure the owner’s incomes and start making money!
Filed Under: Investment Strategies • Property Investment • Property Investment Tips
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