I've been put in an interesting position..

So I have a good friend that has recently come into quite a lot of money (multi millions) over the last few years. He has always been quite good with his money and even before he gained this fortune he had two ip's in his 20's. Since he has gained this extra fortune he has joined into a friends business and this is now turning over around one million net per year. Now to try and cut a long story short he is spending too much time in the current business with his ultimate goal being, the current business to pretty much run its self with him only being a blanket over it making sure everything is running smoothly while doing the same with other business and investments he wants to start in the future.

Now where I come in, in all this is he has approached me wondering if I want to put together a commercial property portfolio together for him and manage it. Issue is, I don't know the first thing about commercial property! I have read a few books and I did do a lot of browsing on the old somersoft forums but like many I never actually took the plunge into property investment. I have told him if I was in the same situation I would take the easy route and just stick most of it in index funds as I believe when we are talking this much money wealth preservation should take priority over wealth creation. But as he has explained to me he wants to create something to proud of and help as many people along the way as possible. Which is awesome for me but at the same time I don't want to lose him money with poor inexperienced decisions! So currently I'm doing as much research as I can into commercial property to hopefully put a plan together for him, but it's very early stages at the moment so I'm just seeing where this might take us. What are everyone's thoughts on all this?

 

Your friend and his money will soon be parted.
You have no clue about it and he shouldn't be asking you if he had any brains at all. (It's nice that he asked you as his friend and all ........but it's stupid.)
I'd advise him to seek out a good commercial buyers agent, who does have a clue.

 

Excellent Reggy
Yes yes yes, accept the challenge and work out the details later. Every now and then we are presented with opportunities that help us grow. This is one of them.

This is one of them ..... you know you have to take it don't you

Book yourself into a commercial managing course and learn how to do it, it's not rocket science. On the job training would be a steep learning curve for you.

Go see take some commercial agents out for lunch and get some tips.

Everything is achievable - we only regret the things we don't do.

 

Very to the point!

But i agree..

 

I have a suggestion start with @Beano very generous with his information and seems the CIP guru on PC

MTR

 

Point him to the Peter Thornhill thread, while excusing yourself as too inexperienced to be a commercial property agent / manager.

I don't see how building a commercial portfolio is "creating something to be proud of".. (not that it isn't a great achievement, but you haven't actually created anything).
If he wants to create something and help people, he could start a charity, or a new business venture that provides jobs...

 

Accept your friends offer, put @Beano on a % of profits retainer but don't tell your friend. Tell whatever Beano says to do to your friend.

You'll make lots of money and everyone will think you're really really smart.

 

Whilst I kind of agree with what your saying. It sounds like this person wants a filter to engage the right BAs in the right areas and monitor and review and advise. Can still involve BA's at the start and once mor experienced cut them out. This guy is obviously to busy to do it himself and buy the sounds of it has picked someone to assist that is a little cautious, not too bullish.

 

CIP is a very fickle beast and I think if you want to take this on you need to talk to some local experts who can guide you in what to buy then think about managing it.
Go see Jeff Klopper at Vend Property who is an excellent Perth resource and does leasing, sales and buying. I would use someone like him to set up the portfolio as to not risk choosing duds. BTW he's based in Perth but has nationwide contacts so could assist with national portfolio

 

I appreciate the responses and help, but I do not agree that he and his money will soon be departed as since gaining the new wealth he has already grown it substantially. I guess the way that I wrote the original thread posts makes it seem that he is very blasé with his money but I can assure you that is not the case. He came to me as he knows I will not commit to anything unless I'm sure I know the ins and outs of it all and wants me to present a plan to him that he can look over and make the final decision and alterations. But I do agree that I'm way out of my depth with lots of research and finding the right mentors/team is required before we make any decisions.

 

As I said in my original post the commercial portfolio is just a small part of his overall plan, he already has a business with employee's and does want to start more once he can get his current business working without his constant input.

 

Well, get on a hurry up and learn, that must be what he is suggesting ?

Be prepared to lose the friendship if it goes pear shaped, that may be the main proviso.

Why not help with some resi first ?

 

If i had multi millions in cash plus a business netting a million annually, resi play is so boring tedious and unexciting.

 

Perhaps be honest and act with integrity. Accept the challenge but disclose that you will be learning as you go to ensure you have sufficient knowledge at each stage to do right by your friend.

Your friend probably already trusts your integrity as a person.... thus the invite. Respect that and protect your integrity.

 

You haven't said if this is what you want to do...knowledge issues aside...

 

Variety is the spice of life....but, yeah, I would not bother either.

 

I personally wouldnt, mixing money and friendship never seems to go down well.