BUSINESS

Wednesday, July 22, 1992 —- North Shore News - 43

Purchasing property through partnerships

WANT TO buy a home — either to live in or to rent out
_ =~ but you don’t have enough money? Or perhaps you do
- have the money for some revenue property but don’t have

the skills or time to invest wisely and manage the piace.

“‘Many people today want to
own property but don’: have a
down payment,’’ said Peter Cle-
meni, who holds seminars and has
produced home study kits on buy-
* ing and managing residential real
estate.

**Just as many people have
more cash than they need for their
rainy day fund —- probably sitting
in boring, low-interest T-bitis and
savings accounts. People also have
-paid off the miorteages on their
own homes, and could borrew
against their equity to invest.””

To help bring ‘‘finders’’ and
investors together, Clement has
developed a new seminar and
workbook: Joint Ventures in Real
Estate — The Science and Art of
Successful Partnerships.

‘Joint ventures come in various
forms,” he said. ‘For example,
the investor puts in the cash re-
quired to close the purchase —
down payment, closing costs, any
immediate repairs, reserve fund.

“The finder finds the property,
negotiates’ the purchase and
manages the place. Investor and
finder split the eventual profit (or
possible loss) 50-50.""

’ A, joint venture could involve
three people: the investor, finder
and manager; the investor stil!
gets half the profit while the find-
er gets 30% and the manager
20%. Or the finder/manager gets
40% and the tenant 10%.

“A joint venture could enable
you to move-into your cwn home
without a down payment,’ said
‘Clement. - :

**The investor puts up the down
payment. You find and buy the
place, and pay for the mortgage,

Michael

DOLLARS AND SENSE

taxes, routine repairs and
maintenance. You alsc pay for
capital improvements but then get
a credit when the place is sold.
“It’s important to keep your
investor informed and to keep all
receipts. Also allow yourself {ots
of time to buy out the investor.””
Clement stressed the importance
of having an appropriate joint
venture agreement; his workbook
contains a model agreement
designed to be fair and equitable
to both finder and investor.
“There are no hard and fast
rules,’* he said. ‘‘Each agreement
can differ according to the par-
ticular situation. Fair is whatever
the partners agree to."”
Clement puts the onus for joint

ventures on finders. — to find-

both investors and properties.
And he warns finders: ‘‘Don’t
expect to make a living at this.

 Surj
. Rattan

’ BUSINESS BRIEFS
ELECTRONIC AWARDS

THE NORTH Vancouver-based
Electronic Manufacturers Associa-
tion of B.C. (EMABC) recently
presented their annual Awards of
Excellence for Innovation in Elec-
tronics to three B.C. companies.

The awards are presented an-
nually by the B.C. Ministry of
Economic Development, Smali
Business and Trade on recom-
mendation of the EMABC,

The two award winners in the
category of systems products are:
@ Dynapro Systems Inc. for its
SOULS integrated building facili-
ties management and control
system, The SOULS system pro-
vides integrated computer control
of all building environment,
mechanical, lighting and security
systems for buildings from 30,000
to over 300,000 square feet.
@ MPR Teltech ULtd., for its
AtmNet Cell Relay Multi-media
system. AtmNet is a packet net-

work technology specifically used
for Broadband ISDN. It is MPR
Teletech’s solution to the problera
of interconnecting and transpor-
ting ‘high-speed broadband data
between dedicated and specialized
users.

The award winner in the indus-
trial product category is Epic Data
Inc., for its multi-purpose termi-
nal (MPT). Epic developed the
MPT using a modular architecture
to meet every industrial data-
collection need in a single, power-
ful unit.

BUSINESS CORRECTION .

A BUSINESS Briefs item publish-
ed in the July | North Shore News
incorrectly stated that several
West Vancouver CGAs were
recently honored by the Chartered
Accountants of B.C. (CABC}. in
fact the award winners are CA's
and not CGA’s.

The CABC represents the
chartered accounting profession in
B.c.

Penny Noble, director of com-
munications for the CABC,
reports that CA is the designation
for chartered accountant.

“Basically, CAs have the most
in-depth, broadest-based training
of all the designations. They are
exposed to a greater variety of
business during their articling and
are the only body to require a
university degree,”’ said Nobie.

“FOR LEASE

MARINE DRIVE, WEST R
1,670-2,310 sqft. air-conditioned j

s retail space.
For further information, cali
Bruneau & Associates Realty Ltd.
at 689-0611

You put in your time but receive

money only when you sell,’

in another in-
the rents

refinance, bring
vestcr or increase
dramatically.”’

Always aim for a win-win situ-
ation, said Clement. ‘‘Work with
willing investors,’’ he advises
finders. ‘‘Develop a reputation for
integrity, honesty, diligence and
success. Have a common goal
strategy.

“Have your investor win. Take
care of her and treat her
money even better than your
owa.”’

Both parties should sleep on a
joint venture agreement and have
independent jiegal advice before
Signing, hesaid. =.

Clement stresses investing in
real estate for the long term, it’s
not a get-rich-quick proposition.

And he readily admits there can:

be problems, no matter how well

each party does his/her
homework. His trouble-shooting
guide includes the following:

Problem: You (the finder) need
more money than originally plan-
ned. Solution: Prepare the in-
vestor for the possibility; budget
for a contingency fund (either
cash or a promise for more money
if needed).

Problem: The property is a dud
and causes grief. Solution: Assess
the cost of staying in the deal. If
it’s not wosthwhile, take your
losses and get out and go for the

-next investment. You (the finder)

might consider converting the in-
vestor's loss.

Problem: Property values drop.
Solution: You are in for the long
term, so hang on.

Problem: You are tempted to
sell because of unexpected costs.
Solution: Consider refinancing or
bringing in another investor.

Problem: The finder dies. Solu-
tion: When a buyer dies before
closing, the deal dies, too.

Always get as much as possible
in writing, Clement said.

“This is not done out of
mistrust Gr worry that the project
will turn sour. The purpose is to
itemize all the. conditions of
satisfaction of the partners, to get
all possible issues on the table,
and to prevent any misunder-
standings from occurring once the
project is under way.”

Mike Grenby is a North
Shore-based columnist’ and in-
dependent financial adviser who
works with individuals; he will
answer your questions as space
allows — write to him c/o The
North Shore News, 1139 Lonsdale
avers North Vancouver V7M

~ |FYOUMISSTHIS

DATE, THERE COULD BE
NO ACCOUNTING FOR

YOUR

August 5th is the deadline.
‘or admission to the start of this

Falls CGA program.

Which means you've got very little
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And if you think its strictly a job for
number crunchers, you've badly

miscalculated.

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presidents, controllers of large corpora-
tions. They make important business
decisions affecting hundreds of people.

Recently, the CGA Association

marketplace.

became Canadas first professional

_
CGA

CHOICE OF CAREER.

’ accounting body to bring mandatory
computer use into its program of stuciies.
Its hardly surprising CGA
enjoy such a decided edge in a demanding

duates

Yet for all the rewards, you don’t even
have to leave your current position to
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lets you learn at your own pace while
you continue to eam a living.

To learn more about CGA, please
call or write for our information kit.

Isn't it time you started being
accountable to yourself?

Certified General Accountants Association of British Columbia
1555 West 8th Avenue, Vancouver, British Columbia V6J 1T5. Telephone 732-12) 1 Fax 732-1252