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| Photo Credited to Katelyn Perry |
Welcome to another blog post in this article as your dear again. Is possible to invest in real estate with no money? In this blog post, we would like to show you about the power of partnership and you will learn about these following details:
- What is Partnership?
- Why Partnership?
- What Happens To The Partnership if a Partner Dies Unexpectedly
- Partnership Has Made It
- How to Invest in Real Estate Without Cash– Using Partnership
What is Partnership?
Partnership is also known as a contract, can be defined as a cooperatiive relationship between two or more people who agree to share their responsibility for achieving special goals. Partnership could be involved friendship, business, organization, team, etc that will share profits or losses.
It shows that if you want to buy a single-family house or real estate project at hand, but you do not have cash at hand, then it is partnership that there cannot be a better time to partner with the real person or organization or team– the required resources because if harnessed properly, then partnership can yield great dividends. And you need to be a good negotiator.
Why Partnership?
Because close study reveals that partnership always would have a chance of success, but for the loopholes, something that is not counted as significant may become very huge, in term of affecting the whole structure and the direction of the business that the partnership is out to achieve.
Partnership is used as a leverage to cash out a single-family house for passive income or sale. Partnership is important because it provides serious leverage for the lack of cash, know-how, time, contact, etc.
By this, I mean that people go into partnership to be able to fill a deficiency via complementary efforts or skills. That is actually the Hallmark of successful partnership. The challenge is finding the partner you can click with. Somebody must be able to provide what the other parties lack.
In that regard, a good partnership can evolve. And in real estate, you can partner for so many reasons. And why people want to partner is because they lack cash or have no money to invest in real estate for passive income or fund it for sale.
For example, I identified a project that I wanted to do it because I understand it, but I don't have enough money to jumpstart it and probably I can't get financing it from another source.
To even get financing from another source, I need maybe, a take-off and equity to show as my contribution and evidence of commitment and believe in the project. Then I can walk up to a partner to get this provided. The person would now collaborate with me, offering his own cash in return for profit on the business.
This particularly, is a good way for real estate entrepreneurs to sort out their investment issues in the kind of time that we are in now because there are a lot of transactions out there that people are not doing— they are not looking at these simply because, they don't have the money to do it.
Using partnership to execute real estate deals, it could as well be that I have all the money but I don't have the know-how as to how to go about excusing that transaction and the transaction cannot wait for me to get the know-how and still come back to execute it.
So in this circumstance, I may probably be looking for someone who has the know-how, to partner with. It could be that I don't have time to go around; it could be that I don't have the contact that can make the project happen. Any deficiency can be the reason to seek partnership.
What Happens To The Partnership if A Partner Dies Unexpectedly
Therefore, I would like you to borrow a leaf from the things that have always bedeviled partnerships, especially in this part of the world. There are instances and examples of people who went into partnership but had to dissolve it because the other party or both parties could no longer continue under the terms and conditions earlier agreed upon.
I would say that one very key thing about partnership is that partners should have a clear-cut, written, well documented and almost exhausttive, agreement that would cater for the following things:
1. What the parties intend to enjoy
2. How profits would be shared
3. The responsibilities of all parties
4. Exit-how the partnership can be dissolved, how one party can exit the partnership, if he/she is no longer interested, right of first refusal, etc.
And you must state all these things and other important ones: “What are the parties expected to bring to the table? What is the time lapse for these that are expected? In what way are they supposed to come?"
These issues must be identified and spelt out for the partnership to be clear. How do you distribute profit? What happens to the partnership if a partner dies unexpectedly? How should it be continued or dissolved? How can a new member be admitted into the partnership? These are the areas you need to look at and have a clearly stated common understanding on.
Partnership Has Made It
Real estate involves a lot of money, but partnership has made it easy because in doing these things, you would have helped yourself to be able to make sure that you are in a partnership that can survive; that you are in a partnership that can last; and like I always say, real estate involves a lot of money, but all the money does not have to come from one man’s pocket. So, you can explore the angle of partnership in taking on your real estate investment.
Partnership is risky because some experience ugliness, others feel not too bad. Some learned certain lessons as they went through. And you may be afraid to choose to participate in this venture because you do not want responsibility. But remember we should not participate in this recession. We should explore this opportunity during the called down economy.
How to Invest in Real Estate Without Cash– Using Partnership
Step 1: Choose a person who can fund it.
Step 2: Choose a good location that you can rent apartment for passive income or that middle class tenants can live comfortably and peacefully in the serene environment.
Step 3: Look for a seller who has a single-family house or self-contained units of a house that they want to sell it quickly for below the market price or has old house that they no longer use it.
Step 4: Call to negotiate with the seller about the market price. Then research around his old house carefully to ensure that you feel satisfied with this condition or that you can fund it or farm it or that tenants can rent it.
Step 5: Call your partner to fund it quickly.
Step 6: Farm it professionally for passive income in comparison to the market price you bought it.
Step 7: You can sell it for maximized profit after being satisfied with your passive income for some years as soon as you clear your debt to the partner. Then move to buy another house again.
You must learn how to play smartly in the market during the called down economy and the booming economy.
Note: You can choose a seller through a realtor or an estate agent or advertising newspaper or magazine or you can call a mortgager about foreclosures you want to buy it.
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