Hello,
I would like opinions on the following…
I am currently considering the idea of being a broker of sorts…
I go out find and evaluate solid investments and allow investors to buy a piece of the investment or the whole thing. I would keep 15 - 20 % for my time and efforts.
Let me know if you have a similar experience and please share it. Thanks
Luc ;D
It sounds like what you have in mind is wholesaling. You put the property under contract and then assign the contract to somebody else for a fee. If you don’t expect to get a RE license, I’d be careful about calling yourself a “broker.”
Well similar to the wholesaling but not quite… what i am talking about is say there is a 9 million dollar property… i would secure the property after valuing it at 11 million dollars… i would go out and get 5 investors looking to invest a million dollars + and together we’d all own a piece including myself. I’d also manage the property to create higher and higher ROI… this is what i am talking about. Any ideas?
Howdy Thinkoutsidethebox:
What you are talking about is called syndication or a limited liability partnership or a Real Estate Investment Trust REIT. These are goverened by the Securities and Exchange Commission and a lot of the shares are even traded on the big board. You are talking millions in equities.
You can do what is called a private placement where you limit the number of investors and limit the amount of investors you offer the proposal to. Still the start up cost are expensive. If you know 5 folks with a million each that are willing to let you play Monopoly with their money i would like to meet them too.
I love your enthusiam and the idea. It is not new. The best way to do deals like this is to get a property bought that needs some fix up and do it yourself or with other peoples money and then sell it to the syndication at the retail higher price and get all your funds returned and still own a % of the deal. This too is not new. Check out Transcontinantal Realty Trust home web site. They are one of the big boys that do this with REO’s etc on a huge scale for the shareholders.
Yes. You would be syndicating deals and subject to SEC oversight. Have you checked into Gene Trowbridge’s course?
Seems like a good idea but requires a lot of work than you had anticipated.
I would start with something simpler like wholesaling and work my way up to the bigger ideas.