How To Buy Property With Multiple Owners

How do you buy properties with multiple
owners? My name is Kris Krohn and that’s been my specialty for the last one and a
half decades is buying properties by bringing people together. You see in real
estate, one plus one people can equal eleven. In other words, we can accomplish
a lot more than we certainly can individually on our own. And today, I’m
gonna break it all down how. In doing any deal, generally, there are
four different components. So, if we were to say this is the PI that represents
the deal then one of those parts as someone has to actually find the deal. Someone has got to bring the money to the table.
Someone’s got to put up the credit with the bank so that you don’t have to put
up all of the money just a small portion. and lastly someone’s got to manage the
deal. I believe wholeheartedly that you should only do the part that you feel
strongest about and then otherwise bring in others. So, when we’re talking about
buying properties with multiple people, who are these multiple people? Well,
here’s a real common one. In my world, I find all the deals and I manage the
whole strategy long-term. And the partners that I often bring to the table,
they’ve put up the money and usually they also put up the credit. And at the
end of the day. I’m doing this and this and they’re doing this and this. That
equates to a 50/50 partnership. Now, I want to drop a really important tip with
you right now. In this scenario, there’s only 2 people involved in buying the
property. The moment you involve more than 2, you run the risk of becoming a
security. And all of a sudden, you have different laws that you have to abide by.
That’s governed by the security Exchange Commission in America. I can’t speak for
other countries. But what that means is let’s say that someone was doing the
deal, another partner was managing, someone else’s freedom, the money, someone
else’s their credit. Now, we’ve got 4 people involved in the deal. And all the
sudden, security laws might prohibit that type of partnership. They might say, “Hey,
it sounds like you guys like the raising funds and use involving different
parties.” So, for me to keep it safe. I usually keep it to twos. If I need a
third person, it’s usually because the person with money can’t put up the
credit and I have a way of bringing in a credit partner without putting them in
the LLC. So we stay a two-person deal but we rent somebody’s credit. So, what I want
to do for you today is I actually want to break down exactly what this looks
like so that you can understand how this turns into practical application. Before
I go further on how to do this, I want you to understand that with partners,
always comes potential for liabilities. There’s some
disadvantages. Obviously, there are advantages .With their resources you can
do things that you couldn’t do on your own. But there are also some serious
disadvantages that you need to take a look at. 1 is how well do you know this
other person and what happens if there’s a personality conflict or there’s a
strategy conflict? Can you resolve it or do you just part ways and sell the home
and people you know wind up less advantageous than when they had started?
Unfortunately, I’ve experienced this before. So, I think it’s important for you
to evaluate the character of the person that you’re getting business with. And
when I evaluate a person’s character, I look at how teachable and reasonable are
they. And I also look at how negative versus positive they are. Because if I’ve
seen two character traits really unwind deals, the first one is just a really
stubborn closed-minded person that is only willing to see things with their
perception. And they’re not open to other ideas or teachability. For me, that’s a
problem. We’re not going to actually partner do deals together if that’s the….
If that’s the case. The other though is someone that is overwhelmed with fear or
scarcity mindset. You know, just they lean towards the negative. The property is in
its fifth week. It’s not rented yet. “The property’s not rented yet? Oh, my gosh.
What happens if it never rents?” And that person can become frankly a drain on
your life. And that energy needs to be managed. So I tend to find people that
are going in with a promising attitude and the promising energy and also ones
that understand, “Hey, investing doesn’t always go the way you want let’s find
out how we’re gonna act when it doesn’t.” And as long as I don’t have those 2
personality issues there, we’re usually game to go. So, I want you
to be thinking that just because someone has money or a different resource or a
deal, it doesn’t mean that they’re the right person for you to do business with.
I want you to put them through these other 2 filters I just shared with you.
Let me walk you through what this looks like what I actually partner with people.
And we’re actually deals. There’s always an order. There’s a perfect sequence of
things. So, what I have found a partner, usually in my situation, I bring the
deals and I do all of the work and I’ve got the track record with 200 experts on
thousands of deals. So, they come into the situation knowing, “Okay. Kris can deliver.
The goal is to multiply the property every 5 years.” And to double things,
right? if we start with five properties and if I
we want 10 properties. In other words, we are always starting off number one, with
an alignment on strategy. And they basically understand, Kris, you’re doing
the deals and you’re bringing the deals and you’re gonna manage all the real
estate. and my partners are usually the funding partners. They have hidden assets
in 401ks and IRAs and they’re pulling from those to be able to purchase real
estate.” Once we’re totally clear on the strategy, the second thing that ends up
happening is we will actually find a deal at that roughly around the same,
time we are going to establish our LLC. Which is a business entity a limited
liability company that the real estate will all be placed into for protection
and form the identity of our partnership. And we’re all gonna open up a bank
account. Basically the bank is for how we’re going to manage the money, the LLC
is for how we’re organizing the business. And the deal is what makes it all
possible. Once I have those things going. then the third thing that happens is now
we’re going to do our due diligence. We’re gonna purchase the property and
we’re gonna do any fix up that was called out on the particular deal. It
might be 2 or 5 or 8 thousand dollars of of cosmetics paint and carpet
and things like that. After that, this property goes into long-term management
where me and my team will be doing the day-to-day of the property and reporting
on everything occurring. We’re going to find the tenants, we’re going to manage age them.
We’re going to be approving any repairs that need to happen along the way.
Generating reports on how much positive cash flow. How the bank account is
affected. How its growing. And then the fifth and final step is when is the
right time to exit this property and multiply. How do we put this into more
deals. Those are the five steps that I have when I work with my partners. And
that just gives you an example of what it looks like when people work with me.
Hopefully it gives you an idea that if you are the one doing the deals what
you’d want to be doing or how you’d structure that but in my case, people
come to me and say, “Kris, I want access to your team. I want to access to your
deals. I love you guys to walk me through this entire process. You’ve done it so
many times. If you click the link below in the description .it’s all about
partnering with me. And has many different forms. So, you can look
more into actually what that means and what that looks like. And so check that
out. But most importantly today, what I wanted to do is basically share with you
when you’re involving multiple buyers. Have clarity on who’s going to be doing
what. Make sure there’s an alignment and strategy vision and system. And then
execute it. Make that deal happen. Un the end, will hold the property in LLC so the
person with the credit and money might be buying it you know get transferred
into the LLC that is co-owned 50/50 by both of us. I’ll take care of the
management. When it comes time to sell, it’s time to multiply and keep on
basically growing the strategy onward and upward. Okay, thank you so much for
watching today’s video. Hopefully it answered your questions and
helped you understand what it looks like for you to actually transact properties
with multiple people involved. Hopefully you got a better idea of some of the
legalities. And for those of you that are saying, “Wait a second. How can I actually
step into some of Kris’s assets and team to actually do this for me. You can
find all of that below in the description. And other than that friend,
make sure that you are a subscriber. Share this video. I love it when people
post these on their social media and to help get the word out there because this
content is dedicated to help you throughout your life. Click the link. Get
with me my team. Let’s get over what we can do together and otherwise subscribe and I
will see you on tomorrow’s video.

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