PARTNERING TO BUILD FINANCIAL WEALTH
If you feel like real estate investing is too complicated … you don’t have the time, money or credit … OR you feel like you are tired of doing it all on your own … PARTNERING is the solution to get you started or to continue growing your portfolio with real estate.
Our purpose is to create partnerships to enable you to invest in real estate that you otherwise may not be able to do without the help of partners. A partnership consists of 3 main legs:
- A Cash Partner – with at least $5,000 to $50,000 cash to contribute to the partnership, but may lack the credit, time, or desire to manage the investment. AND/OR
- A Credit Partner – with a credit score of at least 680 and a debt ratio of 45% or better and a good income but may lack the cash, time, or desire to manage the investment.
- Managing Partner – As the Managing Partner, my team has the management skills and time to take point and coordinate all the moving parts to ensure a profitable outcome.
Q. What if I want to invest in real estate but don’t have TIME, MONEY, or CREDIT?
If you don’t have money and you don’t have credit and you don’t have a lot of time; you can be a member of the Managing Partner team. We will work together to find people you know who want to build a retirement, want cash flow, and who want financial freedom. You can then receive a portion of the Managing Partner percentage just for bringing a cash partner to the deal.
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Partner Rolls, Responsibilities and Typical Profit Splits
- CASH PARTNER(s) – Profit Split 30%
- Provides cash for acquisition and any maintenance costs during the life of the partnership. Expected Total Out of Pocket:
- Growth Markets: $35,000 to $40,000.
- Equity Markets: $45,000 to $50,000.
- Other Expenses
- Business Entity Creation, Tax Preparation, Bookkeeping, Emergency Fund, Attorney.
- Provides cash for acquisition and any maintenance costs during the life of the partnership. Expected Total Out of Pocket:
- CREDIT PARTNER – Profit Split 20%
- Has a credit score of at least 680, a debt ratio of 45% or better, and an adequate income.
- MANAGING PARTNER – Profit Split 50%
- Has the time and skills to create and manage the partnership.
- Holds the right to access Done For You Real Estate USA inventory.
- Holds the right to access the service of the Done For You Real Estate USA Power Team.
- Presents available properties to partners and selects the appropriate property.
- Creates and files all paperwork with appropriate agencies.
- Registers Partnership (LLC) as a domestic or foreign entity as appropriate.
- Obtain Federal EIN (Employer Identification Number).
- Set up bank accounts.
- Takes calls from Property Manager.
- Makes daily decision as needed.
- May have dollar limits on authority without conferring with partners.
- Responsible to operate and manage the partnership.
- Bookkeeping responsibilities.
- Prepare reports as per operating agreement.
- Prepare and file tax returns for partnership.
- Prepare and distribute k-1 to partner.
- Acts under power of attorney for partnership.
- Makes daily decision as needed.
Investment Partnership Risk Protection
CASH PARTNER – Only Investment is Cash
Risk Protection
- Other Partners sign a promissory note.
- Name is put on title as additional security.
- Sign two documents up front.
- One to put Cash Partner on (with conditions).
- The other to take him off if Cash Partner violates agreement.
- If the contribution is personal, and not from retirement fund, Cash Partner can receive a share of the depreciation and business expenses to off-set taxable earnings.
- Sign two documents up front.
CREDIT PARTNER – Only Investment is Ink from a Pen
Risk Protection
- Create an account from which recurring monthly payments are made electronically.
- Put two or three month’s payment in account.
- Property Manager deducts their fees before depositing funds into partnership account or writing a check to partnership.
- Payments covered by deposits include mortgage, escrow (taxes, insurance), HOA fees.
- From rent, restore each month’s payment.
- Create a second account for vacancy and repairs.
- Build this to an agreed amount from rental income.
- Each partner has password access to view the account and verify funds are there.
- Include verbiage in partnership operating agreement regarding payment obligations.
- Example, if there is no money there when a payment is due and it results in a negative on the credit partner’s credit report at that moment they become the majority partner and as such is empowered to make all the decisions.
- They can continue the relationships and take control of the bank accounts, or
- They can sell the property for a dime over the outstanding mortgage and be free of any obligations, or
- You could agree to a different distribution formula.
- Example, if there is no money there when a payment is due and it results in a negative on the credit partner’s credit report at that moment they become the majority partner and as such is empowered to make all the decisions.
MANAGING PARTNER – Investment of Time to Create and Manage Partnership
Risk Protection
- Make sure the above items are accomplished.