Team Up To Buy Investment Property

Are you tempted to buy investment property as part of a property investment club for which you have seen or heard advertising recently? It may be that you are attempting to increase your portfolio of investment properties and wish to pump more money into your portfolio of real estate in order to reach a pre-determined point at which you will be able to realize your dream of becoming a property millionaire.

However care needs to be taken when approaching the point at which you feel able to put your money in the hands of strangers who promise the earch and a potential 40% ROI. Much better to tread slowly and check out these companies as the DTI and OFT are shutting some of these real estate investment clubs down.

What Are Property Investment Clubs

These companies (as the often are) are commercial property investment clubs (PICs) that often offer their members huge discounts and even bigger returns on their initial investments. The collective buying power of the property investment club membership means that the club can negotiate with developers or discounts on buying developments off-plan, therefore effectively building in the returns and gaining a profit on completion.

Whilst there have been some bad reports on companies operating unscrupulously in this market, the premise of the property investment clubs remains sound. So even if you don’t want to hand over your hard earned pension money to people you don’t know, it is possible that together with friends or family, you could start your own property investment club which can really give you more negotiating power when you want to buy investment property.

Property Investment Clubs Have More Negotiating Power

Today in the UK, the number of repossessed property coming into the auction room is immense and is set to grow. If you and 10 friends have 10,000 GBP each to invest, imagine the negotiating power you will have in that room with £100,000 cash to use as deposits. What is more, as the negative publicity over house repossessions grows over the coming 12 months, the banks will want to dispose of more and more of this type of assests quietly. Your property investment club will have an advantage over most individual property developers.

Whether you are looking for commercial or residential property investments, if you have like minded people around you with disposable cash, then you may find it beneficial to club together and form your own real estate investment club. Be sure to consult on the legal ramifications of forming such a partnership, even if it is un-official. Many people have invested in property together in this way for hundreds of years. It’s kind of how building societies started (account holders were members, not customers back then)

Further Reading: http://uk.biz.yahoo.com/mortgage/sarahmodlock/propertyinvestmentclubs.html