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THREAD: Buying property with others.
the big issue with this is trust. If you're buying it with your kids, make sure you can trust them.
If you're buying it with anyone you've known less than 20 years, be very careful.
the big issue with this is trust. If you're buying it with your kids, make sure you can trust them.
If you're buying it with anyone you've known less than 20 years, be very careful.
Like a marriage, have a contract in place - a pre-nup. You need to specify how the deal will be formed, how it will continue and how it might end.
Include clauses for who pays running costs, bond and transfer costs, selling costs, etc etc etc.
Include clauses for who pays running costs, bond and transfer costs, selling costs, etc etc etc.
Make sure you stipulate what happens when one person cannot pay the amount due every month (if there's a shortfall) - i.e.
What happens on default?
How profits will be split?
How will maintenance be handled?
What happens on default?
How profits will be split?
How will maintenance be handled?
At what time will people be able to get out of the deal? Under what conditions?
How will the buy out work?
Will you need to get the first option or sell the property?
How will the buy out work?
Will you need to get the first option or sell the property?
Make sure you cannot be voted out and lose your money.
Make sure the property isn't fully on another person's name.
If the property is in a company, have legal paperwork in place to make sure you won't lose your investment.
Make sure the property isn't fully on another person's name.
If the property is in a company, have legal paperwork in place to make sure you won't lose your investment.
Decide on the structure. Would a trust do the job? Is this more like a company (or a stokvel)? Should you consider putting it on all your names?
All of these depend on the property usage (residence vs investment), exit clauses of the contracts and intention of the partnership.
All of these depend on the property usage (residence vs investment), exit clauses of the contracts and intention of the partnership.
Remember that often times everyone brings something different to the table: a good property deal, cash, handyman skills, coffee, sectional title management, etc etc etc.
Make sure the negotiations are documented.
Did I mention to have legal paperwork in place?
Make sure the negotiations are documented.
Did I mention to have legal paperwork in place?
After all of this, do I think it can work?
Yes.
But do your due diligence.
Make sure the whole process is planned out.
Money blinds people's eyes.
Be careful.
Protect yourself.
Yes.
But do your due diligence.
Make sure the whole process is planned out.
Money blinds people's eyes.
Be careful.
Protect yourself.
