Who can benefit from Real Estate Joint Ownership? March 19, 2010
Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.Tags: Arizona Vacation Property, do's and don'ts joint ownership, joint ownership, kuhbock, ownership agreements, real estate education, real estate resources, vacation home strategies
add a comment
Hello real estate investors and professionals
First and foremost the Joint Ownership model allows the average family or investor the opportunity to participate in purchasing a vacation or investment property. www.azjointownership.com
Families can now benefit from the depressed real estate prices in the US and sunbelt locations such as Arizona, Florida, Nevada, California and other user friendly warm weather states.
Other obvious people or groups that can benefit from working with a Joint Owner model are parties attached to the vacation home property market, this would include; real estate agents, teams and brokerages, individuals, lenders, developers, and investors to name a few.
As an example, the net worth of a median Canadian household in 2005 was $148,400 with only 3% or 415,000 of Canada’s 13 million households could be classified as high net worth in 2005.
Therefore 12,500,000 potential vacation home purchasers or the 95% of the possible vacation home buyer market cannot purchase a vacation or second property by themselves! That is just the Canadian vacation home buyer market!
AZ Joint Ownership, LLC, works with all the above interested parties enabling purchasers to leverage their capital and also creating the opportunity for the real estate service industry to increase their sales by providing Joint Ownership packages, mentoring and consulting for their clients.
We have developed an in-depth Joint Ownership investment and acquisition model that allows prospective buyers to finally move forward on their desire to buy an investment or vacation home while the current real estate market opportunity exists.
What is vacation home & real estate joint ownership?
Joint ownership is a partnership in the ownership of (Title To & Equity In) a house. This is NOT time share or fractional ownership……
Typically the ownership is split between multiple vacation home investors, with the each investor/partner having equal shares or some combination of interest in the real estate investment.
As with other shared-equity plans, the idea behind vacation home joint ownership is that it is a way for people to own vacation or investment real estate properties who otherwise would be unable to purchase a property without taking on a large mortgage or incurring substantial debt.
Why Joint Ownership?
Although most people understand the responsibility that is included with larger purchases of a secondary residence or vacation home, there are some people who find they would not use the asset on a full time basis. For those people who are looking to find value in simplifying certain aspects of their lives, Joint Ownership will provide ownership & use of an asset while reducing the responsibility of management and cost of ownership. Benefits of Joint Ownership include ease of convenience, hassle free ownership, and cost savings.
The key to any Joint Ownership arrangement is to have everything in writing, even if you intend to partner with family or ‘best’ friends, the proper agreements puts everything up front in writing so there are no issues or misunderstandings later on after the honey moon period of purchasing a vacation home.
Things like cleaning after use, repairs for broken items, usage, third party usage, smoking rules, pet rules and consequences, usage calendars, book keeping, etc. all have to be documented and signed off by the partners. These docs can even be registered on title if need be.
We have spent 3 years creating and refining the model, agreements and templates and this is what we offer in our Turn Key package.
If anyone would like more information on creating a Joint Ownership group to purchase a vacation property or would like to partner with us to increase your real estate sales please contact us.
Happy house hunting!
Michael Kuhbock
Email: mkuhbock@azjointownership.com
Do’s and Don’ts of Joint Ownership June 23, 2008
Posted by mkuhbock in Arizona Vacation Property.Tags: do's and don'ts joint ownership, joint ownership, ownership agreements, usage agreements, vacation home strategies
add a comment
Firstly what is Joint Ownership?
Vacation home joint ownership is a partnership in the ownership of (equity in) a house.
Typically the ownership is split between multiple vacation home investors, with the each investor/partner having equal shares or some combination of interest in the dwelling.
As with other shared-equity plans, the idea behind vacation home joint ownership is that it is a way for people to own vacation properties who otherwise would be unable to purchase a house without a large mortgage.
There are some basic common sense do’s and don’ts for joint ownership situations but also a few things you can only learn from experience.
Here are a few of the things you should consider prior to getting into a joint ownership situation such as;
1. Can you play well with others, you will need some flexibility, patience and understanding, remember not everyone thinks and acts as you do, you will want to make sure that the partners either stay friends, family (although it is hard to remove family from ones life) or that they stay business partners,
2. Can you live with structured occupancy of the vacation home as you will be sharing it with others,
3. Can you operate on a budget, remember others will be sharing in the bills thus unbridled spending is probably not something that should be done by one or more partners,
4. Can you be respectful of the other owners tastes and idiosyncrasies, see point 1,
5. Can you afford the investment, remember that it is not only the up front acquisition price and costs but then the home has to be furnished and supplied, then there are monthly operating costs which are every increasing with the cost of energy,
6. Unlike Canada, there are many transaction and closing costs associated with US real estate purchase,
7. Tax, ownership and income issues need to be reviewed, we have found a new book that covers everything off, http://transitionfinancial.com/productcart/pc/viewPrd.asp?idcategory=&idproduct=1 ,
8. Mortgages are available to Canadians but the costs rise accordingly, especially closing costs,
9. Very tight user agreements need to be in place covering off guests, cleaning, repairs and a whole raft of other considerations,
10. Very tight ownership agreements need to be in place covering off issues such as defaults (financial & usage), death, rights of passage, selling etc……
11. Usage schedules need to be built which cover off the first 5 years of ownership so that there are no surprises or conflicts,
12. Type and location of the proposed property, this is a detailed list which I will follow up on in another post,
Although some of the above can seem oppressive if you address everything up front and go into joint ownership with all the paperwork and agreements done up then everything seems to just fall into place.
In summary, do get all of the purchase, operating, usage and ownership agreements in place up front and don’t assume anything at all otherwise it will bite you in the ass sooner or later.
Until the next post,
cheers,
Michael
Michael Kuhbock 