GROUP INVESTMENT \ PARTNERSHIP OPPORTUNITY

[Mansoor Fazel]

Hi Everyone,

So as a somewhat moderately experienced investor I am coming across what I believe to be a common issue. Getting the approval from a bank\lender when I don't have enough down or other reasons. I personally have between 10-20k o invest, and find several great properties in my nationwide search, but the issues start when I look for financing, or the requirement for 20% down, plus closing costs, lender commissions, etc. So I started to think about "Creative financing and alternatives" I came up with two possible options:

1. Selling partial interest in one of the two rental properties I currently own.

Explanation: I currently own 2 properties, bought under my own name, that are conventionally financed. The properties are both cash flowing and have great tenants in them. I figure a good way to get more funds for other deals would be to offer a share in the profits of the already occupied properties. Something like 50% of the property value in exchange for a fully managed and cash flowing property. Has anyone tried this? Have any advice? Would anyone be interested in something like that?

2. A joint Venture\partnership agreement to purchase OUR next rental property.

Explanation: Now that I have a little experience in both locating a property, and managing one. ( have done so for 3 years and running ) I think a good idea would be to get a few investors together, you know, those of us who have a decent amount to invest (say 20k min each) and we can work together to locate a property, vote on it, and once we find a good one, we can put in a cash offer. The idea would be to look for 5 partners, and a property within 125k. Cash would be pooled, partnership formed, and cash flow split according to your invested ratio. This would free us of the need to pay interest on borrowed funds, and we could each realize a profit with minimal involvement. Depending on the location of the investment, one of us could manage it, or if out of the area, we would hire a reputable property manager. The advantage of this is a safer bet because 5 people running the numbers and taking on the same risk would be smarter than a lone investor, and as can potentially buy into the properties if\when partners want to be bought out, or continue to work together on future properties.

Is this something anyone would be interested in ?