Property investor Clubs ?

Is there any "Property investor Clubs/ groups" that put in so much each to invest in low price property say in Regional areas ?

Just say we had 5 people together and we each put in 20k deposit each (100k) and borrowed the rest as a group to buy a 400k house , then we rented it , then we saved and bought another and used the equity .
So there would be like 5 names on the title

We could meet say once every other month (Hungry Jacks), and have a treasurer etc

Im thinking more about it as i have my ex flatmate from earlier this year invested with me in one property and it went well.
Managed to buy this Regional unit at way way below selling price that the Bank didnt bother to come out to do a valuation!!!
We now have equity in that property to get another.!

The Lawyer only charged $350 to do a agreement .

Im thinking a few more people i may be able to invest and borrow for a City studio around 450k and rent it out for around $400 week.

We put the rent back into the loan and expenses then keep paying it off each

The end goal is to either keep getting more properties or sell it at a CG once paid off

The negatives we dont know each other although the rent could be postively geared so you dont need to be worried about making payments.

You will need at least 40k -50k if we were going to go x 3 in a City Studio and then we need to visit the Bank together and wait weeks to sign docs etc

 

How do people get out if they want to liquidate and move on?
How will you share decision making about the portfolio?
What if someone wants to buy into the portfolio more and others don’t?

Looks like it is complicating a simple process with more legalities. Maybe keep it small to a partnership and slowly build from there when you hit a borrowing limit...

 

Getting a loan with multiple people is tricky.

Exit strategy with multiple people is tricky.

 

And watch your servicability to go crap.

 

What do you mean by this ? Thanks

 

No it wasnt tricky...just went to a mortgage broker Bank one and he sorted it out quite efficiently even though took about 6 weeks he passed it

We both had the deposit, he looked at payslips , said no valuation needed as it was underpriced and 6 weeks later it was approved.



I found it so easy .The Lawyer was great about $1200 for conveyancing , he asked if we wanted a partner agreement to be made and at this stage said no.


THe Mortgage broker wasnt interested in our "agreement "together or anything like that , only that the loan can be paid, in fact i think he thought we were a "couple" maybe

 

What happens if one of you dies? 1 Gets tuberculous and wants to sell and the other one cannot buy him out? Supreme court costs would be more than the property potentially.

Why not just go it alone?

 

Im pretty sure we are "tenants in common" which means it automatically passes onto the other in event of death.

Even so , we will eventually get a "agreement" done that will set out responsibilities AND if we had more investirs we would get this done immediately.

Why not just go it alone? Because i can invest in more IP's at a quicker rate with more people.

 

You maybe right about the debt issue and yes i think going in a "group" to invest has its risks like everything else for example , one of the group may stop paying their share of the monthly payments etc so something has to be drawn up about that .

There is a company in Potts Point that sells a template of this kind of thing but i would prefer to see a Lawyer to draw up a agreement if there were more of us.

Im not sure of what " serviceability" means but as one poster saud it could be affected?

 

Unit Trust?

Anything would still get messy if one forced to sell at bottom of market and other wants to and can afford to hang on

 

That would be Joint Tenants - the death of one means survivor gets the 'share' of the deceased automatically. Would you want a stranger to inherit your share? But if he dies first it could be good for you.

The agreement is ineffective in most situations. What if you want to sell and he doesn't? Supreme Court action needed as a contract won't be able to be signed.

If you went alone you could still have the same equity, but without the hassle.