Real estate properties

Real Estate Boom in Dubai

admin — Tue, 29 Jun 2010 04:12:37 +0000

The growth of the Real Estate market in Dubai is protected from whatever fluctuations taking place in oil prices based on short and medium term. In fact, it is estimated that higher prices will only spur on the growth to higher speeds. The value of some of the Real Estate projects in GCC, Iran, and Iraq has already crossed $750 billion. Nearly 33% of this is concentrated in the United Arab Emirates with Dubai contributing the maximum. This figure is higher than the combined GDP in the same region, which is lower than $700 billion. According to expert estimates this trend will continue despite the fact that the oil prices are expected to fall in the short and medium term.

One key thing to note is that so far the growth of Dubai has been consistently defying all analysts. Since the past 5 years all sorts of experts have been saying that it is about time the Real Estate market in Dubai stopped being so profitable but so far the bubble has not burst. Though such growth has never been sustainable before no one is able to explain why it continues to thrive in Dubai. The GCC has the 17th largest economy in the world comprising of 500,000 high income earners and a GDP of $525 billion. The total ½ trillion dollar economy creates more than $500 billion in revenue that is used for investment. This volume is believed to boost the Real Estate and construction sector in Dubai.

With a growth rate of 25% per year the UAE GDP is expected to reach anywhere from Dh 500-900 billion by the year 2010. The UAE has already surpassed Egypt as the 2nd largest economy in the Arab countries. It is now second to Saudi Arabia which is going through its own explosive growth period. The projects in UAE total at around $225 billion with Dubai holding nearly $125 billion.

The population of Dubai is also expected to go from the current 1.1 million to 4 million by the year 2017 and by 2020 it may exceed 5 million. This growth is expected to put a great strain on the infrastructure. The government has already spent $2.5 working on the road network covering 9,600 kilometers.

Dubai has always been the most popular place in the UAE because of its visitor friendly policies. There are many investment opportunities available to people in Dubai. In the past 2 years other emirates have also noticed the profitability from Real Estate development and they are also beginning to contribute to the growth of the region.

Because of the heavy investment in the tourism, infrastructure has further encouraged the growth of the Real Estate market. The increase in the Abu Dhabi population has increased the cost of rentals there. In fact, Abu Dhabi has all the potential requirements for avoiding the issues that are threatening to hinder the growth of Real Estate market in Dubai. These issues include shortage of man power and large scale construction projects that take too long to complete.

By: William King

How To Know Real Estate When You Become An Agent

admin — Mon, 28 Jun 2010 11:48:03 +0000

Many real estate agents enter the real estate market each year attempting to know real estate so that they can represent their clients who expect that they know something about real estate. Some agents feel that they know real estate after they take their state exam because they don’t know any better. But the truth is that they don’t know real estate until many things transpire to make them a real estate agent and those things come from knowledge.

In this article, I will give you what I know to be the truth about learning real estate and give you some simple step by step instruction on what it takes to learn real estate and become the professional that is hired by the public to protect them. This is really simple but it requires a simple approach that can be tedious and boring to a salesperson. However, as a top agent in my field and the number one agent in Georgia, I can tell you, this is what has to be done if you are going to protect your client.

Learning real estate is a process

Real estate is a process of learning the system of the contract and the MLS. Here are the 7 steps to becoming good at what you do for a living:

Read the Purchase and Sale Agreement 50 times or more over the course of the first month in the business. Apply questions of when, why, where, how to all paragraphs. Ask your real estate broker if they have a written test they could give you to make sure that you are comprehending the agreement. Study all addendums, exhibits and forms that can be added to the Purchase and Sale Agreement closely, applying the same questions as above to each and every paragraph. Study the MLS system so that you have a working knowledge of the MLS listing itself and the features of the system. Map out a few homes and then think what you will do to notify the seller that you are going to visit the home. Make a script and a process of how you will show the home, listing the steps from getting your lockbox key updated all the way to locking the house back up when you leave. Learn the mapping system that you will use. If you are using a GPS, map book or mapping software, make sure that you fully understand it’s flaws. Write a fake offer for a buyer pretending that you are representing them. Fill in all the blanks and ask yourself the questions that will represent this buyer well. This is where you ask your family members to help you. They make up a scenario and you represent them. Of course you are not going to send the offer to an agent. Study construction flaws of your area on the internet. However, remember that most state’s licensure for a real estate agent is limited to only the duties of an agent. This does not include making recommendations for repairs or being an inspector with your clients. Make a packet of information for your buyers showing that you are an expert and that you have thought of the information they need to make an education purchase.

If you do the simple things above, you will find that you will become an expert quickly. Almost everything you need to know is in the Purchase and Sale Agreement that your state uses. Many people attend continuing education and that is fine, but the rubber meets the road when you are an expert at representing your clients in a legal and binding document.

By: Rhonda Duffy

Real Estate Investing: America Rents

admin — Sat, 26 Jun 2010 17:04:04 +0000

Most people in America rent a personal dwelling!

Just think how many families rent a house or an apartment, a duplex or a condo.

Yet, nobody prefers renting.

Who wouldn’t want their own home, if they had the choice.

Even if, say, someone moves into town on a temporary basis, wouldn’t they prefer buying a house, gaining appreciation even for the short term, and selling for a profit in 6 months or a year?

Maybe there are exceptions, but I can’t imagine anyone really preferring to rent when they could own.

After all, most rental houses are not even preferable. The condition of a rental house usually declines after being occupied by family after family. Rental houses usually are neglected and abused. They become less desirable. A rental house is NOT THE BEST HOUSE IN TOWN simply because it IS a rental house! And sometimes a rental house becomes a real dump. Families move in, families move out, and the landlord CANNOT and IS NOT ABLE to maintain a rental house in TOP CONDITION! The main reason a rental house is impossible to keep pristine is because renters don’t treat a rental house like their own.

Yes, there are exceptions, but most rental houses are not up to snuff. I know, because I use to own $10 million worth of rental houses. I had some very nice properties, but there was always something that needed repair. Things go wrong that need fixing, and perfect maintenance is impossible. Rental houses are less desirable because they can never be brought up to first class and maintained that way. If I had been the owner AND occupant of that rental house, I would have tried to fix it up and keep it in top condition.

When you fix up houses to sell, “Renting America” becomes your marketplace.

(1) You can never exhaust the demand. Everyone prefers their own house. It’s still the “American Dream.”

(2) It’s easy to create an immaculate house for re-sale that outshines most rental houses.

(3) Selling renovated houses to the tenant in the marketplace rather than to the house-hunting market is much easier. Renters are readily convinced that paying monthly rent is a financial downer. Sorting out the credit-worthy renter with an offer to own becomes a win-win proposition.

An untapped niche market in real estate investing is fixing up houses that can be purchased by America’s renters.

By: Dr.Phil Speer

Panama Real Estate Shows Potential and Bright Future

admin — Thu, 24 Jun 2010 00:40:03 +0000

Panama has always been a great spot to invest, it’s because the growing trend nowadays is that investing overseas, it’s probably this year is becoming a rough year because of the nationwide housing crisis people rather investors tries to opt for searching the horizon and in this case its going to other countries in which is having a good year in their own respective market or some place that are a hot spot or just beginning to be a hot spot. Panama Real Estate has been a revelation so far. In recent reports the growing popularity of the area has been an underdog to other Latin American countries that are bagging tourists. Now that the tables have turn for the market in which Real Estate on countries such as Panama and any of the country in the Caribbean strip is making its way to the mainstream.

It is rather a surprising instance that the market is over viewed as a good place to invest mainly because the market has provided some potential progress, in March numbers the listings have grown scientifically and investors have shown very high interest. The condo market there has been in a good progress. There are reports that potential investors are keen on taking properties on the beach side, suggesting that they will make Panama sort of a little Miami in a way. I like what people are suggesting to do with Panama’s shorelines because they are doing a great job attracting investors. It is really exciting getting the market’s attention at hand. More and more people are taking notice and that is something to look forward into.

In time, Panama will most likely get significant improvement because of the development the officials are making. Suggesting that the resources that the country has is qualified for potential real estate property, the gain of the country’s real estate business numbers are good. It’s something to look forward to and have an eye on. Let it be known that the investment on the market is getting nice attention for potential home buyers and investors, U.S. developers are also getting their eyes locked on the country and scouting for a nice location to build their projects with. Whether it is commercial, residential or condo real estate market, Panama’s future is bright and it’s obvious.

Not only that the market is really valued it is also processed in a very good situation. I, myself would like to get my hands wet on the market. It just shows so much promise. That is why you see big time companies and investors showing interest in the land. It attracts investors, naturally, it’s like a given. The thought is that the market given the chance to improve has a lot to offer, be it Real Estate, commercial or any type of business. Panama shows bright lights and the connection it makes to their own market is significant.

Jron Magcale

http://panamarealestatetrends.com

By: Jron C. Magcale

Real Estate Investing – Finding Cheap Houses

admin — Mon, 21 Jun 2010 09:05:02 +0000

Real estate investing expertise can certainly accommodate the luxury home market. In some ways, the upper end of the housing marketplace produces easier success than the lower end. More skill, however, is required to sell the luxury home. But more important, supply and demand is critical in selling the luxury home. To get “stuck” with any home that does not sell easily can be treacherous, but sluggish sales for the luxury home can be disastrous.

“Cheap homes” are at the other end of the housing spectrum. “Cheap homes” abound everywhere. Every community in the country has cheap homes, because the predominance of the population lives in inexpensive housing. More people comprise the middle and low income bracket than the high income bracket.

“Cheap homes” is a very ambiguous term that is relative to an area. For example, “cheap homes” have lower value in a rural community than in a populous area like New York City. But even adjoining counties in any State may maintain different definitions of “cheap,” even though separated by only a few miles.

“Cheap homes” do not reference slums or ghettos necessarily. Real estate investing in these areas might embrace federal grants or HUD Section 8 housing.

My focus in this article is the use of “cheap homes” as a starting place for a real estate investing career. “Cheap homes” in this article is NOT the bank “red lined” crime area, or where drugs and prostitutes are rampant, or where housing has been severely abused or neglected by property-owners and/or tenants. And “cheap homes” in this article is not the burned-out or dilapidated building.

My definition of “cheap homes” for the beginning real estate investor is the less-expensive housing that accommodates the middle or middle-low class citizen. The demand for this housing is usually high and constant. The risk for real estate investing is usually low. And the effort needed to penetrate this marketplace is easiest.

I get occasional calls questioning the existence of “cheap homes” in certain parts of the country. These calls usually come from California and certain states in the northeast like Maryland. The caller has read my web site and challenges me, “You can’t find a cheap house here!” Now, we all recognize that the medium pricing index for housing varies all over the country. “Cheap” means a different price to everyone. But the outcry of these challengers is that Los Angeles has no “cheap” houses, with its average housing cost exceeding $600,000.

Here’s my response to these callers. Drive into downtown L.A. and locate the city’s tallest office building. Find the janitor. Ask him where he lives, or follow him home. He may drive out 25 or 50 miles from work. But he knows where the “cheap home” can be found. He has already done the research. He has done his homework. He has found decent housing for his family, and it’s not in a high crime area. Drug dealers, prostitutes and pimps are not roaming the streets. The houses are not beat-up and deteriorating. He has a good job and a decent salary, he is middle class, and he has found a “cheap house.” Chances are, his whole neighborhood is a good target area for searching out a “cheap house” for starting a real estate investing career. These properties can be found everywhere.

I live in Nashville, Tennessee and not in Los Angeles. Housing is a little cheaper in the South. I bought $1 million in “cheap houses” during each of my first two years when I started my real estate investing career. I had acquired $10 million of these “cheap houses” within 4 years. I’ll bet the ranch that I could duplicate that same success in L.A. or any area of the country. Real estate investing is real estate investing, wherever you live, and relatively speaking, “cheap houses” abound everywhere.

I contend that “cheap houses” are the lowest risk property for beginning a real estate investing career. And I argue that “cheap houses” can be found all over our country.

By: Dr.Phil Speer

Money Matters – Real Estate Tips For Buyers And Sellers

admin — Fri, 18 Jun 2010 22:14:02 +0000

Are you thinking about buying or selling a home? Starting and operating a small business of your own? Maybe you need a little help with personal motivation or computer technology… If so, you may find this column useful over time because we will be discussing ways you can save time and money, protect your legal and financial interests and deal on a more level playing field with industry operatives to help you avoid costly mistakes made by so many people. Let’s face it, it’s a complex world out there and either you operate from a position of knowledge and insight or from guesswork and blind trust. Money Matters is designed to help remove the blinders. Knowledge is power right? We believe applied knowledge is powerful.

To jump-start this column we decided to throw out a few tips for homebuyers and sellers before the real estate season begins. You may want to clip this article and tuck it away for safekeeping. Buying or selling a home is the largest investment of a lifetime for most people…it’s a BIG business deal composed of people, emotions, contracts and cash…all the ingredients for legal and financial pain if you don’t know what you are doing (and most people don’t).

1. Buyers: real estate agents legally represent sellers, NOT buyers…their job is to get the highest possible price for the property. They are not “your agent” and what you tell them may be used against you. Caveat Emptor is legal jargon meaning “buyer beware”…

2. Buyers: avoid giving more than $100.00 when you write a purchase offer on a home. In this way, if you cannot complete a transaction you have less money at risk. Large good faith deposits do NOT guarantee you will get financing. Why risk your money?

3. Buyers: arrange your home financing first, BEFORE you look for a home. Doing so gives you the same power as a cash-buyer You can use your financial pre-qualification to SAVE THOUSANDS when buying a home if you are a smart negotiator.

4. Buyers: when you sign a purchase offer, make sure that you write above your signature the clause “subject to buyer’s attorney’s approval”. These 5-magic words (known as a weasel clause) can get you out of a bad deal if your attorney does not approve… you can (weasel) out of a bad deal…

5. Buyers: remember; a purchase offer becomes a legally binding contract when accepted by the seller. Fully understand the legal details before signing ANY contract or document.

6. Sellers: avoid signing long-term listing agreements with any real estate agent. Keep the listing contracts limited to 90-day increments so that you can review selling performance.

7. Sellers: Avoid signing a listing agreement with part time agents. Use only full time agents so that you increase your chances for more professional representation.

8. Sellers: Interview multiple agents before signing a listing contract. Make sure the “potential selling prices” they are quoting you are accurate. Many agents will quote high selling prices just to get the listing contract. There is a saying in the real estate business “if you don’t list, you don’t last”…many agents will do and say most anything to get you to sign a long term listing contract. (See tip-6)

9. Sellers: avoid signing purchase offers with unqualified buyers. Doing so removes your property from the market while waiting to find out you are dealing with a dud.

10. Sellers: Make sure your agent presents you with an itemized marketing plan detailing the selling activities that will be performed during the listing agreement.

If you are interested in further information about Smart Books, check us out online at http://www.smart67.com

Copyright © 2005
James W. Hart, IV
All Rights reserved

By: Jim Hart

What is a Real Estate Release Agreement?

admin — Thu, 17 Jun 2010 14:52:39 +0000

You don’t have to be a real estate expert to have heard of release agreements. A release is one of the most common types of contracts in the world of law. They are used to allow a company to use someone’s image for commercial use. However, a real estate release agreement isn’t quite the same thing. In most cases, releases are used by prospective buyers to release the seller from the mortgage or liens they have on a property so that the property is debt free. The form is extremely short and is often only one page when presented. Let’s take a look at a typical contract requiring a seller to obtain release of mortgage on a property.

The first part of the contract clearly outlines the date that this agreement is being signed, the names of both parties involved in the transfer of the property as well as any spouses of the members involved in the agreement. The second part of the agreement outlines the terms and conditions that the property in question is under. It goes over how much debt the property has attached to it and whether the property has a mortgage debt or a lien debt associated with it. It also outlines the purchase price of the property and how that purchase price can now be used to pay off any and all debt associated with the property. This type of form is used mostly to ensure that the seller will eliminate all debt from a piece of property when the sale is complete as agreed upon in the original sale agreement. Some people consider this form to be a bit redundant, but you can never be too careful when it comes to legal wrangling and property.

The final part of the agreement only requires the signer to include their names, the amount of the total debt still present on the property and finally, the amount that is being paid off. Much of the contract will simply be pre-typed text, often a template, that outlines the seller’s responsibilities once the sale is finalized.

If the buyer and seller of the property agree beforehand, a real estate release agreement isn’t necessary. It could be part of the original sale agreement that the buyer is responsible for paying off any existing debt on the property and not the responsibility of the seller. Since every legal agreement is different and many of them have their own unique provisions, some real estate release agreements can vary considerably from the one outlined here.

In conclusion, the real estate release agreement is a safeguard instituted by the buyer to ensure that a piece of property that has debt associated with it is paid off in full with the money gained during the sale by the seller so that when the final transfer of the property is finalized, it is debt free. It is vital that this agreement be included if you are buying property that has debt attached to it.

By: Mark Warner

Your Real Estate Expenses Guide For Buying A Home In Israel

admin — Sat, 12 Jun 2010 22:20:42 +0000

This guide will walk you through the various expenses associated with a real estate transaction in Israel.

Whether you are looking to buy or sell a property in Israel, it will help you plan ahead and make sure you are on top of the game. It is built in a Q&A format for your convenience.

What Is the Purchase Tax?

Purchase tax is payable by the purchaser in a real estate transaction. Generally, the tax is between 3.5% and 5%, depending on the property value. A reduced tax of 0.5% is payable by an Israeli resident that is purchasing a residential apartment, if it is the only flat he owns. On real estate sales between close members of a family when no money changes hands, purchase tax is 1/3 of the normal rate of tax.
From the point of view of Israeli income tax, a wife with children under 18 are considered a single family unit, and therefore if the wife owns a property in her own name and the husband purchases a second property in his name, he will pay a higher tax rate as if he already owns a property.

What Is the Sales Tax?

Sales tax was introduced on 1.1.2000 and it applies to the seller. The tax is 2.5% of the value of the sale or 0.8% on the sale of a residential property by a building contractor. The sale of a property by a private individual is exempt from sales tax in many cases.

What is the commission of the real estate agents and brokers in Israel?

The commission in Israel is payable by each of the sides of the transaction (both seller and buyer). A good agent will save you more money than he costs, as he has a wealth of experience which will help you make the right decisions.
The customary brokerage commission payable is:
On the purchase or sale of property, 2% of the inclusive price of the property.
On leasing property for a period of one year or more, one month of rent.
Value Added Tax is added to any commission due (17%).
Payment of the full commission is due on the signing of a binding agreement to purchase or lease a property.

What is the legal fee for the real estate lawyer?

When buying a first-hand property from a contractor, you will have to pay 1.5% plus VAT to the contractor’s lawyer for legal fees.
In the case of second-hand purchase, you will pay between 0.5% and 1% plus VAT to the lawyer that will handle matters on your behalf.

What are the property inspection fees?

This is important especially when you are buying a used property. You should have the property inspected by a certified engineer or surveyor before signing the contract and make sure you have a written statement at hand. The average fee is approximately $400-$500 plus VAT but it may vary according to the size of the property.

What are the currency conversion rates?

When purchasing a property in Israel the payments are usually made in Israeli Shekels (NIS) and not in Dollars, Euros, etc. When converting money to Shekels, the bank usually charges a fee: between 0.1% and 0.5% of the amount that is being converted.

By: Shlomi Ben Ishai

The Three Cardinal Rules of Negotiating Real Estate Transactions

admin — Sat, 12 Jun 2010 05:14:50 +0000

You can find hundreds of books on the art of real estate negotiation . . . but pardon my frankness, many of these books offer stale strategies and tactics that just do not work.

For example, in many books you can find the ABC rule – “always be closing.” That is, you want to have a bunch of deals in the works and you want to get to “yes” as quickly as possible in order to close that deal.

However, getting to “yes” ASAP means you leave out a bunch of steps in the middle, such as carefully pre-qualifying your prospect by asking lots of questions. (I call this process “Getting to ‘no’ first – meaning, you weed out those who aren’t serious about a deal).

It’s also why I’ve simplified negotiation down to three cardinal rules: the person who mentions price first loses, get to know your opponent before meeting with him or her, and always get your agreement in writing.

Negotiation Cardinal Rule #1: The person who mentions price first loses

When I first started doing lease options, I had a woman call me to see if I had a specific type of property that she could then lease to own. She had $8K put aside but unfortunately at the time, I didn’t have anything in inventory that met her requirements. A few weeks later I found a property and called her about it and said that if she liked what she saw after doing a drive by, we could do business that very day.

She ended up loving the property. We did the walk through and as she and I talked, I knew that $8K was sure money in my pocket.

“Jim,” she said. “I have a problem. Remember how I said I had $8K? The problem is I don’t have $8K.”

My heart fell clear to my stomach and my knees went soft. “Uh oh,” I thought.

She then went on to say, “I don’t have $8K, I have $10K. Is that ok?”

Now, I if had opened my big mouth and had said at the beginning of our negotiation talk, “I’ll need a check for $8K,” I would have never learned she had an additional $2K in her pocket. The moral being – never be the first person to talk about price.

Instead, ask lots of open-ended questions that will give you solid information in order to determine where people stand. For example, when I’m talking to a person who is looking for a house or a lease option, I ask questions such as, “It sounds like you’re living in a great place. Why do you want to move?” (What I’m really asking is, “Are you a deadbeat?”)

Or, if I’m sitting at someone’s kitchen table and he’s spilling his guts to me about his house going into foreclosure, I ask, “If you’re able to sell the property, what you would you be comfortable asking for it?” Having the property owner tell me first what he wants for the property is akin to him showing me his cards before he makes a bet. In other words, it gives me the advantage.

Negotiation Cardinal Rule #2: Learn about your opponent before meeting

One of the first things lawyers do when preparing to negotiate is consult a lawyer’s directory. They want to know which school the opposing lawyer attended, what firm they work for, if they’ve made partner, etc. And, if you’re the lawyer who works for a larger firm, you’ll have the opposing lawyer come to your office in order to intimidate him or her.

The same principal – know you opponent — works in real estate negotiations. For example, if you’re working with a bank on a short sale, you’ll want to get to know the bank and its methods of operating and whether its personnel are “user friendly” or they’re a bunch of pit bulls. One bank I work with is very confrontational and negotiating with them is like pulling teeth. I learned very quickly that I have to have all my facts, comparables, etc. ready and at hand when dealing with them because if I screw up, I do not get a second bite at the apple.

Knowing your opponent also means learning what kind person he or she is. For example, analytical people or number crunchers will want you to substantiate and document everything. Touchy-feely people, on the other hand, will want to talk things out.

To learn more about your opponent, talk to people in your network, do some online research (i.e. do a Google search), and attend your local REIA meetings – people love to talk and by asking questions and being a good listener, you’re sure to pick up some good “off the record” data.

Negotiation Cardinal Rule #3: Always get everything in writing

Although we all want to believe other people are good and honest, the sad truth is that disagreements can and do occur in real estate negotiations, which is why you need to put all agreements in writing. This is especially important in Massachusetts, where verbal agreements are not enforceable.

If you do get a verbal agreement, at the very least follow it up with an email or letter outlining the conversation and what was agreed to by each of you. If you’re dealing with a bank regarding a short sale, send a quick fax to whomever you spoke with stating something like “These are the parameters of the deal and this is what we agreed on” and then list everything discussed in the conversation. Be sure to sign and date it and call the person to ensure he or she received your fax.

Developing your negotiation skills takes time but is well worth the effort. In order to negotiate your way to better profits, don’t blurt out a price first, get to know your opponent before you step into the negotiation arena, and always get everything in writing!

By: James Gage

Real Estate Partners – A Good Idea?

admin — Fri, 11 Jun 2010 06:05:05 +0000

We were looking for real estate partners because we were new to the Tucson area. We found that two identical houses here can be $50,000 apart in price if they are three blocks apart. Also, the styles are different from anything we had in Michigan, so it would be good to have some help figuring value and what buyers want.

At the Arizona Real Estate Investors Association meeting I announced that we had money to invest in fixer upper real estate, and we were looking for partners. The host wrote our names and phone number down on the overhead projector along with the others. About three days later we got a call.

Sam and Nikki were nice people, and we got along well when we met. Their offer had been accepted on a house. Looking at the comparison sales they had found, it seemed like a good buy. They had done rough estimates of the rehab and remodeling costs, and it looked like we could make some money. There would be a third couple involved, so the expected $75,000 profit would be split three ways. Agreeing in principle to the deal, we arranged to meet the other partners at the house after closing.

Too Many Real Estate Partners

Six people with six opinions can be a problem. I never understood why the beautiful wood floors had to be torn up and replaced with carpet. For that matter, I never understood why they couldn’t at least be carpeted over without the expense of tearing them out. Both my wife and I thought it was a crime to stucco and paint the beautiful brick exterior of the house, but were assured that buyers here would like that better. Raising the roof of one room seemed expensive and unpredictable, but the ceiling was a bit low.

There were plans and new plans, and weeks of stressful anticipation evolved into stressful worrying. We discovered that the houses in the area were selling for less than we initially thought, that the rehab cost would be more than we thought, and that all the other partners expected to do much of the labor, rather than hire it out. The profit projection dropped from $25,000 each to $10,000, and we felt there might actually be a loss.

We dropped out of the deal. Fortunately the other partners had procrastinated for several weeks on the signing of the joint venture agreement. They also were decent people, and had noticed our anxiety. Nikki called to suggest we let them find a way to finance it without us, about two minutes before I was going to call to say we were out. It ended amicably.

We learned a lot. I’ve had partners before, but I let the partner take my money and do his thing to make us a profit. This group decision-making, especially with so large a group, just doesn’t work, at least not for my wife and I. One day, standing in a Home Depot hopelessly looking at carpeting samples, I also realized that non-financial contributions need to be clearly defined according to each persons knowledge and skills.

We truly hope they make a lot of money on the project. If they do, we may even be willing to be partners with one or the other of the couples. If so, though, we’ll just look at the plan, put up the money, and let them do their thing. That’s my idea of real estate partners.

By: Steven Gillman