1. Is the property in my name?
In most cases, Dani obtains the mortgage, so the property will be under his name. Your partnership interest and capital contribution are secured by legal documentation, such as a formal partnership agreement or a trust where you are a beneficiary. In some cases, if the purchase settings will allow it, the property title will go into a trust, and you will be a beneficiary of the trust.Â
2. What is my total financial commitment?
Your commitment is the capital required for the down payment and, associated closing costs, and ongoing operational expenses that will be required beyond what the rental income can cover. Dani handle financing.Â
3. What happens if the property is vacant?
We actively work to minimize vacancies through our professional management. However, in the event of an extended vacancy, partners will be consulted on the best course of action to cover expenses and re-stabilize the property.
4. How is the management fee calculated?
The management fee is a pre-agreed percentage or a flat fee of the gross monthly rent. This fee compensates for all the day-to-day operational tasks, such as tenant management, maintenance, and financial reporting.
5. How are profits distributed?
Net cash flow, after all expenses including the mortgage and management fee and after maintaining a reserve operating budget, is distributed to the partners based on their agreed-upon equity percentage. This distribution typically occurs on a quarterly basis.
6. What is the expected duration of the partnership?
The partnership is structured for a long-term hold, typically 7-10 years, to maximize appreciation. However, the exit strategy is determined in the initial agreement.
7. How do I know my investment is secure?
Your investment is secured by the asset itself (the property), a comprehensive legal agreement, and our commitment to transparency. We provide regular financial statements and updates on the property’s performance.
8. Can I be involved in the operational decisions?
While this model is designed for a passive investor, we value your input. Major decisions, such as a large capital expenditure or the eventual sale of the property, will be discussed and agreed upon by all partners.
9. What is the process for selling the property?
The sale process and a potential exit strategy are outlined in the partnership agreement. When the time comes to sell, all partners will agree on a listing price and strategy, and the profits will be distributed based on the equity split.
10. What if I want to get out of the partnership early?
The partnership agreement will detail the process for an early exit. This may include a buyout option, selling your share to another partner, or other pre-defined terms.