How do you find partners in buying a IP? 50/50 share

Discussion in 'Investment Strategy' started by Darlinghurst Boy, 28th Jul, 2015.

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  1. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    lI often thought of going 50% in a investment property with someone.
    Obviously its good to know them first but even if you didnt i think if they have the same goals yours it would still work out.

    Could it work? What are your tips?
    I really want to find someone to go 50/50 in investment properties and maybe do some renovations .
     
    Darlinghurst Boy, 28th Jul, 2015
    #1
  2. HUGH72

    HUGH72 Well-Known Member

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    Don't do it, your future goals may change, one party may wish or have to sell. The other party enters a new relationship etc etc.
    It also limits your future serviceability as you are liable for the total loan but only half of the income is considered.
     
    HUGH72, 28th Jul, 2015
    #2
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  3. 158

    158 Well-Known Member

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    You and @fullylucky would be an 'A team' dream JV partners.

    I wouldn't hesitate to recommend him. Keep us posted.

    pinkboy
     
    158, 28th Jul, 2015
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Very risky. Joint loans with each liable for the whole debt..
     
    Terry_w, 28th Jul, 2015
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  5. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    I didnt know that , i guess we would have to register a CompAny of some sort.
    Didnt they once have propertyy investment clubs ?
     
    Darlinghurst Boy, 28th Jul, 2015
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Lenders will want all directors to give personal guarantees for a company loan. You could be a shareholder but not director, but then you have lost control. A major shareholder may also be required to give a guarantee
     
    Terry_w, 28th Jul, 2015
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  7. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Buying joint severely limits your future borrowing capacity, especially now that the only lenders who will consider halving the liability have terrible-to-average servicing. If at all possible, don't do it.
     
    Jess Peletier, 28th Jul, 2015
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  8. fullylucky

    fullylucky Well-Known Member

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    This is a stupid idea. Two people want to do different things at different times what then?

    One really needs the money and wants to sell now but you don't. it just locks it down and hard for both parties to do anything. can't get an equity as well. Bank will say nah that doesn't count. It's not 100% yours.

    If you lack the money to buy an IP then just save up. Don't eat out at restaurants everyday. Save up.
     
    fullylucky, 28th Jul, 2015
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  9. Sonamic

    Sonamic Well-Known Member

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    Marry them.
     
    Sonamic, 28th Jul, 2015
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  10. Propertunity

    Propertunity Well-Known Member

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    You take on a JV partner when you borrow 50-80% from the bank and you tip in the other 50-20%.

    That's not always a JV partnership that ends well either. It does for most but not all. I'd keep the partnerships at that level anyway.
     
    Propertunity, 28th Jul, 2015
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  11. DanW

    DanW Well-Known Member

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    Besides the very good reasons others mentioned, it can also Kill future borrowing capacity since you are normally considered liable for the other half of the loan as well (in the eyes of most banks).

    If it is your own partner, then consider buy 2 cheap properties instead.

    Long term it is good for us usually to buy in multiple names instead of joint names as it helps us distribute property purchases to maximise land tax thresholds overall, and helps us structure for other tax reasons as well.

    Just buy cheaper properties.

    Some $200ks in Brisbane and Adelaide..
     
    DanW, 28th Jul, 2015
    #11
  12. dabbler

    dabbler Well-Known Member

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    Do not do it unless it is a live in partner.

    You have no idea just how bad it can go wrong,
     
    dabbler, 29th Jul, 2015
    #12
  13. Perthguy

    Perthguy Well-Known Member

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    Perhaps a unit trust would suit?
     
    Perthguy, 29th Jul, 2015
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  14. Arnel

    Arnel Well-Known Member

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    If you purchase land to develop under a unit trust... Won't you have stamp duty implications on the back end once each member of the unit trust wants there part

    Eg dev of 6 units, land purchased under unit trust... 3 units each allocated in individual trust... Stamp duty will apply :/ @Perthguy
     
    Arnel, 29th Jul, 2015
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  15. Bunlee

    Bunlee Well-Known Member

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    Hi all

    I am reading this thread with much interest as the idea of doing the same is dribbling in the back of my mind.

    I recall that a few years ago I saw the web site of a lawyer that specialises in property purchases between friends / unrelated parties. I believe that he specialises in formulating appropriate agreements between these parties that are unique to these arrangements.

    It was a useful site from memory.

    regards
     
    Bunlee, 29th Jul, 2015
    #15
  16. spludgey

    spludgey Well-Known Member

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    Tried RSVP? ;)

    Personally, that's the only kind of partner that I would consider buying a property with.
     
    spludgey, 29th Jul, 2015
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  17. moridog

    moridog Well-Known Member

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    I bought an IP with a friend, I could not lend enough on my own, yes, it has reduced my borrowing capacity but we did equal amounts of renovation, our skills complement one another, we trust one another, I rent it and pay him rent. For us, it has worked out really well, asset has appreciated it nicely, we are waiting for re zoning and will consider what happens then, we bought it 4 years ago.
     
    moridog, 29th Jul, 2015
    #17
  18. DaveM

    DaveM Well-Known Member

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    Nothing destroys friendships/family/businesses like fights over money.
     
    DaveM, 29th Jul, 2015
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  19. Bunlee

    Bunlee Well-Known Member

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    Bunlee, 29th Jul, 2015
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  20. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    I guess m thinking more in line with a investment club/ group of some kind.
    Judt say 4 of us got together and bought something , something like that .
     
    Darlinghurst Boy, 29th Jul, 2015
    #20
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