Family Real Estate Ventures

by James & Miel on January 12, 2009 · 0 comments

We thought our readers would be interested in hearing the latest on buying a place in Portland.

We’ve now received back the comps from our real estate agent and will likely get the interest rate info from our lender in the next day.

There have been some recent developments that we hadn’t expected. We discussed the project with James’ younger brother Lexi, as we’d need some local support with managing the place. Miel’s twin sis would be helpful, but she is expected her second child any day now and will obviously be occupied by more pressing matters.

When we called to ask Lexi about his support in doing some of the local management, he asked if we’d be interested in going in as partners. As it stands, he has $20k saved up that he would like to invest. Buying a place of his own has less appeal, as this would be significantly more expensive than what he pays at a shared house and would tie him down in terms of location.

While there are certainly down sides to mixing business with family, it feels like a proposition that could be a win win on both sides.

On our side of things, having an extra $20k to add to our $40k would mean that we’d be able to easily break even on the place that we have in mind now. It is also easy in terms of numbers, as it would be split in thirds. We would have someone local on the ground to help out. Having a vested interest would ensure this help as well. It would also make it easier to cover expenses. Overall we’d have the same amount of investment either way.

Lexi would have an opportunity to invest in real estate that he wouldn’t have otherwise. He’d also have more of a commitment to the place rather than just helping out us in his spare time. Being in his early twenties it would also likely help just to have the money socked away where it isn’t tempting to head to South America or something. In the long term it would likely be a good investment of his money.

In the long term should James & I end up living there at some point, or Alexi, we could then just continue to act as if we were paying rent – even if part of this went to ourselves.

We are obviously still thinking it through, but we thought that we’d mention it to our readers. If you have any experiences of similar family business matters we’d love to hear your comments.

Miel

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