Real estate investors see potential benefits to working with a partner to invest in real estate rehabs, according to a realtor.com article.
Many investors are putting aside the urge to control every aspect of a real estate investment in exchange for a partner and the ability to possibly take on more properties in their portfolios, writes Kathleen Lynn. One reason is funding-related.
In terms of sales, investors purchased about one in five single-family homes in 2016, according to the National Association of Realtors. The investors’ share of the market has been steady since 2013, though it rose as high as 27% in 2011 after the housing market crashed and home prices fell sharply.
Now that the market has rebounded, those investors are paying more, and taking out bigger loans, for their properties. Hence the need for collaborators.
Some investors hope that by partnering, they can produce the necessary funding and avoid borrowing from banks altogether. Plus, it can be harder to get financing for investing in rentals than it can for a property flip, notes David Hicks of HomeVestors.
There is capital to be found outside of banks. Active investors who lack funding find ideal partners in those who have the capital but prefer to remain passive investors.
Not only is it possible to partner to invest in real estate, it’s possible to partner with one or more qualified retirement account to fund investments. A retirement account could even be partnered with another funding source outside of a retirement account.
For more information on how partnering could potentially help your investing, download the guide, “10 Ways to Partner with Your IRA.”