Investing

Joint Venture Investing

A joint venture is a partnership agreement between two or more parties to engage in a specific business endeavor. In our case, we create joint venture (JV) partnerships for the purpose of investing in real estate. Our shared goal is to invest in properties that provide both ongoing cash flow (income) and long-term appreciation (capital gain). The combined cash flow and capital gain returns are split 50/50 between the partners in the JV. Typically, our partnerships are structured around a purchase and hold timeframe of 5 years. This allows sufficient time to monitor the ongoing income from the investment and to ride out any natural fluctuations in property values – this is a “buy-and-hold strategy”, not a “quick flip” strategy. (We do have opportunities for investor who are interested in short-term investments in quick turn property investments – contact us for info).

This is the easiest and simplest way to get started in real estate investing – from the investor’s standpoint the investment is almost entirely hands-off once the property purchase is complete. Here is a brief breakdown of the respective commitments and responsibilities in our JV partnerships.

What you do:

• Invest your money.
• Invest a couple hours of your time to perform due diligence on the investment.
• May or may not sign personal guarantees required for mortgage(s).

What we do:

• Investigate location/area to invest in
• Screen/filter potential investment properties using realistic rents and/or expenses.
• Write offer on selected property (this may involve multiple offers and multiple iterations since typically not all offers will be accepted).
• Negotiate terms and conditions of offer.
• Finalize offer.
• Set up the legal structure/corporation, and co-investor structure usually via a joint venture or limited partnership agreement.
• Select property manager, onsite manager and other professionals (such as tax advisors, inspectors, appraisers, bankers, engineers, roof experts, boiler mechanics) that may be required to inspect the property initially and operate the property on a day-today basis.
• Perform all marketing and rent/re-rent activities.
• Perform or manage all property improvements, repairs, painting, landscaping in order to achieve maximum rent and/or resale value.
• Keep accurate records of all expenses, such as: property management fees, subcontractors , onsite managers, taxes, insurance, realtor, legal, advertising and/or related expenses to market, upgrade, rent and later sell said property.
• Work with our team of professionals and suppliers: Realtor, lawyers, mortgage brokers, appraisers, locksmiths, contractors, handymen, Rona, Home Depot or other supplier accounts.
• Negotiate and set up preferred vendor, supplier and contractor list.
• Negotiate with financial institution to obtain, initially and/or later, re-finance using 1st, 2nd and/or CMHC insured mortgages.
• Manage all relationships with banks, realtors and/or 3rd parties.
• Set up reporting and payment mechanism to investor.
• Act as the primary interface to property manager, or may manage properties inhouse.
• Adjust rents frequently with market realities.
• Invest frequently (but not always) personally into the venture.
• Sign all necessary legal documents.
• File annual or quarterly statements/documents that may be required by various jurisdictions.
• Sign required personal guarantees for required mortgage(s).

Rent-to-Own Investing

In this type of agreement, we facilitate the purchase of an investment property for the investor and simultaneously put in place a tenant/buyer with lease-to-own agreement. The investor has the benefit of ongoing income from the property rental as well as a profit from the eventual sale of the property to the tenant/buyer. This type of arrangement has helped thousands of families to afford their own homes and to rebuild credit that may be damaged due to divorce, unemployment or sickness. The lease-to-own program greatly minimizes the potential problems associated with property maintenance and destructive tenants as the tenant/buyer is responsible for maintenance and has a vested interest in the property as they will eventually purchase it.

Short-term Investing