Sunday, August 07, 2005

Real Estate Investment Group

Business Type: Real Estate Investing Local Shares

Estimated Start Up: $100K-$250K.

Where: Housing markets mentioned in the pending "bubble".

Do you think there is a bubble coming? I am not here to argue for or against, but inform you that either way, the intelligent investor is still making money whether it rains or shines.

The run up in real estate prices over the past 4 years has been nothing short of breath taking, especially in my two hometowns of Manhattan and Los Angeles. But I am really concerned when my old high school friends that used to take the remedial math class, approach me about taking out a an option ARM mortgage or buying a $100K house in November and selling that same house for $350K.

But for those of us that are experienced in real estate investing or making money wisely period we must realize that no one man is an island. Of course you can flip here and there, but when you are in a market where your investment candidates are 500K plus, one must be careful that their next investment is not their last.

So use the strength of many investors to secure higher end properties, less prone to market moves and competition. Essentially this idea is nothing new, but on a local stage, many 6 figure candidates are missing out on the potential to leverage their investments with the funds of investing partners.

Gather a pool of 5-10 investors, appoint and pay a manager to acquire, analyze and invest in higher end properties that may be too risky for one person to do by themselves. Highlights include background checks, LLC formation, attorney consultation but once the "foreplay" is over, the potential to dominate a market with deep pockets is endless. Of course mortgages are involved and business banking but this is an effort take beginner's from investing Chump to Mogul Trump.

Each investor is allocated a shares of the property and investment fees, but I would rather see 7.5% of $500K profit than 100% of a $12K profit.

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