Q. I am involved in a 3-way investment on a rental property and we are being forced to sell because of a DOT project. Our profit on this property will be approximately $75,000 and we need to figure out how to split this up. Being close family members, we weren't too concerned about figuring this out we bought the property.
I would really appreciate any suggestions from real estate investors experienced with partnership investments like this.
Here are the figures for the capital and work/mangement invested by each party.
Investor #1:
Invested $150, 000 by taking out a regular home loan.
Lived at the property and payed "rent".
Did 85% of the maintenance, improvements and rental property management.
Investor #2:
Invested $75,000 from a home equity line of credit.
Did 0% of the maintenance, improvements and rental property management.
Investor #3:
Invested $25,000 from a home equity line of credit.
Did 15% of the maintenance, improvements and rental property management.
Thank you!
I would really appreciate any suggestions from real estate investors experienced with partnership investments like this.
Here are the figures for the capital and work/mangement invested by each party.
Investor #1:
Invested $150, 000 by taking out a regular home loan.
Lived at the property and payed "rent".
Did 85% of the maintenance, improvements and rental property management.
Investor #2:
Invested $75,000 from a home equity line of credit.
Did 0% of the maintenance, improvements and rental property management.
Investor #3:
Invested $25,000 from a home equity line of credit.
Did 15% of the maintenance, improvements and rental property management.
Thank you!
A. Since Investor #1 paid rent and primarily maintained the home, it would be split like this
$250,000 purchase price; profit is 75,000 (I assume you have already taken the maintenance out of this)
Investor #1 paid $150,000 / $250,000 = 60% of $75,000 profit = $45000
Investor #2 - paid $75,000 / $250,000 = 30% of $75,000 = $22500
Investor #3 - paid $25,000 / $250,000 = 10% of $75,000 = $7500
If you haven't taken out the maintenance, then you need to deduct the cost of maintenance out of the profit and pay each of the parties back for the maintenance they paid. Keep in mind that investor #1, as a renter, would normally have had to maintain the property but I'm assuming that he did more than just "maintain" the property.
$250,000 purchase price; profit is 75,000 (I assume you have already taken the maintenance out of this)
Investor #1 paid $150,000 / $250,000 = 60% of $75,000 profit = $45000
Investor #2 - paid $75,000 / $250,000 = 30% of $75,000 = $22500
Investor #3 - paid $25,000 / $250,000 = 10% of $75,000 = $7500
If you haven't taken out the maintenance, then you need to deduct the cost of maintenance out of the profit and pay each of the parties back for the maintenance they paid. Keep in mind that investor #1, as a renter, would normally have had to maintain the property but I'm assuming that he did more than just "maintain" the property.
How can I invest in cash only rental property not with cash but using a loan?
Q. I live in Los Angeles looking to buy rental property in Florida. I'm looking at small investments (under 40,000) to then rent out. How can I take out a loan so I don't use all of my own money? (Cash only sellers will not wait the period it takes to secure the loan . . . ).
A. You would need personal loans leveraged against your other assets.
YOu are very brave.
YOu are very brave.
Drawbacks of using debt when investing in real estate?
Q. I have friends that tell me that they are making a lot of money by using leverage in real estate.
They say that it magnifies their profits while reducing their risks.
What are the drawbacks of using debt to invest in rental properties?
They say that it magnifies their profits while reducing their risks.
What are the drawbacks of using debt to invest in rental properties?
A. Declining real estate values. Tenants who don't pay.
What are some alternative ways to finance a 2nd rental property?
Q. Here is the situation. I have one rental property that is a triplex through a land contract in Columbus Ohio. I have had this property for about 6 months now. I am still learning the business of being a landlord so any advice is greatly appreciated. I am wanting to purchase another property but I don't have enough cash for a down payment on a loan through a bank. What are some options to purchase another property?
A. Oh my brother I have the same problem I find great deals all the time that will cash flow even if I borrowed 100% of the money but no one wants to lend.
Really, your only options are:
1) friends/family loans
2) bring on outside investors
3) hard money lenders
4) real estate investment clubs
2-4 can be found by google searches.
Good luck, I wish it were easier. I really hate lenders. They're the worst part of the work needed to invest.
Really, your only options are:
1) friends/family loans
2) bring on outside investors
3) hard money lenders
4) real estate investment clubs
2-4 can be found by google searches.
Good luck, I wish it were easier. I really hate lenders. They're the worst part of the work needed to invest.
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