Best scenario to leverage a family property

4 Replies

I am a real estate broker and investor.  My family has a commercial between San Antonio and Austin, TX.  We are now wanting to leverage the asset to expand wealth and acquire additional assets.  Our current strategy is to borrow against the asset, then use that cash to buy flips, rentals, and homesteads.  I am wanting to discern the best strategy.  I also want to find the best resources for private lenders.  We are wanting to borrow from private lenders to acquire flips.  They would be in first position.  We would use our cash for the rest.  I am new to the forum and am not sure when/how best to share details of a deal like this.  Thoughts?

There are too many variables here to give a proper response. Who owns the property? What is their credit score? Is there any experience within the family with owning real estate? How much is this property worth and how much are you looking to borrow against it? The reality is that you may have a very valuable asset but the owners of the asset may have no experience in real estate so banks may not lend you any money. You are looking for private lenders which leads me to believe there are inherent credit risks associated with your asset. If you could go to a local bank and get the money you wouldn't be here asking for advice. Cash is great but experience in investments is just as important. 

Rob, Thanks for initial response.  Property owned by parents. Value around $1M. Two siblings, myself and my sister.  Credit scores are good for all but credit obligated.  Fair amount of experience. I enjoy private money lenders over banks because better terms can be negotiated and common sense can be used.  I am seeking discernment on the best structure for sis and me to take on the task. I have thoughts on the subject but wanted to see what ideas were on BP. 

Originally posted by @Clifton Kaderli :

Rob, Thanks for initial response.  Property owned by parents. Value around $1M. Two siblings, myself and my sister.  Credit scores are good for all but credit obligated.  Fair amount of experience. I enjoy private money lenders over banks because better terms can be negotiated and common sense can be used.  I am seeking discernment on the best structure for sis and me to take on the task. I have thoughts on the subject but wanted to see what ideas were on BP. 

 Best strategy for structuring the partnership? Best real estate ventures to pursue? I didn't quite understand the question.

We will likely utilize an LLC or some form of a trust. I was going to BP to see if there was a best management practice for this type of scenario that I could utilize as an alternative. Especially since it is a family project. Because I deal with estates quite often, I enjoy the opportunity to help families build wealth through real estate. I am new to the BP community and thought to seek input on the topic to make myself more knowledgeable. Sorry if the dialogue was/is vague.

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