Partnerships for Leverage and Buying Power

[Jim Carmichael]

There seem to be several investors on here at many different levels, all of which look to be investing alone. Although many of you are from the same area without realizing it. You have so much more buying power together than you do as an individual. Setting up partnerships is relatively simple. The challenge is who's in charge? That can also be resolved by voting/ assigning someone as the signer, create a buying criterion that does not require review and working within those boundaries. You can also join a group set up by a third party, say a broker, who has skin in the game too. Same criterion based group, but now you have motivated person in a given market working for you full time. 

Here's what I suggest as a working outline;

5 member minimum, 4 investors and a broker. Each investor own 20% an the broker gets a 10% ownership (yes on top of commission). Buying criteria for an out of town investment, a minimum of 50 units and a 12% COC return. You can add a class of building, locaion class, etc. If it a group that prefers value add, you can set up the criteria for that as well. I know you are questioning the brokers' role of an owner, but fiduciary is one thing, disclosing they are part of the deal is another level of legal protection and who is going to work harder for you? Plus you have eyes on the ground.

You get to scale quicker, you are paid a quarterly "dividend" as an owner. Each person will be assigned a role in the LLC. This arrangement could work for less than 50 units if the broker is capable of managing the property.

Something like thiis interest you?