Share:
So if you’re like me, you and your friends are either hustlers or overachievers.
Now “hustlers” isn’t a bad term. It just means you’re go-getters, and you’re looking to get things done. If you guys are like that, you generally want to make your money work for yourselves. You want to see what the long term is going to be without just working for the rest of your life. So what do you do? Maybe you get together and you want to invest in a property.
Now that sounds easy. Put together the cash, run forward, get a property, make a lot of money. I would hope that works out, and sometimes it does, but I would recommend a few things before you decide to jump into any investment with people called “friends” and/or “family.”
Number one, take a step back. Have a true conversation about what your investment strategy is going to be. Are you investing for the long term? Are you in buying and flipping? What is your strategy and what is the purpose of doing this investment together? After you have that sorted out, get to number two.
Number two, get an attorney. Get through the deep, deep conversations that you need to have about roles and responsibility, the amount of capital that’s going to be invested, and the timeline to pull out if those circumstances do arise.
Number three, before you run out there, get an agent and get a lender. Those two things go hand in hand. A lender is going to tell you what you guys should be purchasing, what structure of lending is going to work best for you — are you buying a five unit and plus property which means you’re looking for a commercial loan, what are the due diligence factors that are going to be required financially for each of you guys to make that investment? And your agents going to help you along the way to identify what is the best investment for you and your group, whether you guys are trying to buy, hold and flip, all of those factors are going to be very critical based on what the property is currently set up as — what are the conditions of the property, what are the required renovations for the property— your agent can guide you along with that.
So if you’re looking to invest with a group of friends, ask us more questions and we’ll share more information.