3 Couples Wanting to Invest in Real Estate Needing Advice

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3 Couples Wanting to Invest in Real Estate Needing Advice

Donna Adamek
Investor · Santa Clarita, CA · Member since 2014 · 25 posts · 2 votes

Here is my(our) question......

We have 3 couples that are wanting to start investing in Real Estate together.

The 1st couple has $50k+ and can work on the projects plus can do the research for future projects

The 2nd couple has the major cash of $100k

The 3rd couple can (only at this time) provide work for the rehabbing (HVAC plus electric and the wife has Property Mgmt and construction scheduling experience).

All 6 people work full time, with 1 ready to retire at 60 in February.  Some get off early at 3pm so they can do what is necessary.

We are looking for some advice on how to go about forming this group, especially the one that has no cash but the skills.  

We would appreciate any info.....

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  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    10y

    Hello @Donna Adamek

    The best plan of action would be to contact a lawyer that could help you pick the best entity for this group (i.e. LLC or S-Corp). Once they give you that advise it will be the operating agreement that will become the biggest assist for this group. This is a document of an LLC or S-Corp that gives a define action plan and map for the group for who to do what, the percentages the person(s) get, and all the way up to what happens if someone whats to walk away from the whole project.

    The next challenge would be to find financing. Anything property that is not a commercial property (i.e. 1-4 units) will be traditional financing. Anything above that magic number 4 will be a commercial loan that will be more flexible in the sense that your group can give the bank the pro forma of the property in question and they will fund the deal off that information. Traditional financing will have to qualify each and every person in the deal, which can be more time consuming and you may hit many more walls verses a commercial loan.

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  • Allen Fletcher
    Investor · Colorado Springs, CO · Member since 2015 · 252 posts · 131 votes
    10y

    @Donna Adamek

    You guys need to sit down and write down your goals as a partnership, rules for how deals will be done, division of labor, division of profits, etc. Once you have all done that you should have a fair idea of how to set up the LLC and start investing.

    Allen Fletcher

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