| Investing in Real Estate can be an intimidating | | | | endanger the assets of the whole club. By shielding |
| experience, especially on your first time out. It can | | | | the assets in a legal entity only the percentage of |
| be a daunting task to come up with all the money | | | | the assets that can be attributed to any one |
| you may need to get started investing in Real Estate. | | | | individual can be attached or attacked. Conversely, if |
| But you don't have to try and do it on your own. A | | | | some action of the club were to cause a lawsuit, the |
| Real Estate Investment Club is a great way to bring | | | | members could be protected personally from the |
| together people who have different talents and | | | | actions of the club. |
| attributes to act as a single unit to invest. | | | | Elect officers of the club and define each member's |
| There are different types of investing partners who | | | | duties. Designate, for example, which member or |
| individually bring to the group some asset that is | | | | members will be searching for properties to bring to |
| valuable to the rest of the members. You may be | | | | the club and who will do research on the properties. |
| experienced in construction or even a contractor but | | | | Establish how financing will be handled and how title |
| you lack the knowledge you need for financing, or | | | | will be taken on the property. In the absence of a |
| finding property or other aspect. Perhaps you lack | | | | legal entity, one or more individuals will have to take |
| the money to get started. If the latter is true, by | | | | title. With a legal entity such as an LLC, the entity |
| finding a money partner you can solve that aspect of | | | | could possibly take title. |
| the equation. By bringing in a licensed real estate | | | | You want to establish the working business model of |
| agent to be a member you can have a great source | | | | the club. Will the club be doing Real Estate Flips or do |
| for property leads. Similarly by finding a person who | | | | you intend to buy, hold and rent out the properties |
| works in financing, you can benefit from his or her | | | | for long-term gain, or perhaps you will be doing both. |
| knowledge of the financing industry. | | | | There are existing Real Estate Investment Clubs that |
| Now I know what you are thinking - if I bring in all of | | | | you may want to join also. These are clubs that |
| these partners, I stand to lose a great deal of the | | | | normally meet once a month in cities all over the |
| profits as opposed to just doing it myself. But the | | | | country and are generally open to all comers. Most |
| beauty of assembling a group of professionals in an | | | | will charge a nominal entrance fee but some do not. |
| investment club is that you can be doing many more | | | | Almost all do have additional benefits that they will |
| projects than you could do on your own. | | | | afford to their paid membership and most have a |
| Conceivably, you could be doing as many projects as | | | | discounted annual membership available. The |
| you have members. While one project is in the | | | | difference with these clubs is that they are |
| remodel or rehab stage you can be looking for your | | | | sometimes organized for profit and offer you |
| next deal or two. As all of this is going on, another | | | | different items to purchase, from educational courses |
| project can be actively being marketed for sale. With | | | | and seminars to actual real estate deals, from which |
| a system and a team of professionals who each | | | | they get a commission or a percentage of the sale |
| bring something different to the table, you can handle | | | | (see Not all are for profit though and they will merely |
| many more projects. If your club starts closing on | | | | charge the membership fee to cover costs to bring |
| one property a month, it can add up to a significant | | | | you speakers and other special events. You can find |
| income even though you are splitting the profits with | | | | lists of these clubs on the internet. |
| the other members. | | | | There are some national real estate investment clubs |
| Once you assemble the members you want to be in | | | | that you can join online. These clubs normally offer |
| your club, hold your first meeting and establish the | | | | educational material, support links to valuable |
| ground rules. Set forth all of expectations of each of | | | | information, teleconferences with experts in the |
| the members, how often you intend to hold | | | | industry, and so on. This type of club normally |
| meetings, the amount of monthly dues, how profits | | | | conducts all of its business online as opposed to |
| (or losses) will be handled and so on. Explain to all | | | | having regular physical meetings. One of the largest |
| members that whenever you invest, it is possible to | | | | clubs currently is They have an extensive set of |
| lose part or all of your money. Also explain to all of | | | | resources and help available for all Real Estate |
| the members that income taxes will the responsibility | | | | Investors whether they are individuals or in a Club of |
| of each individual member. Allow all of the members | | | | their own. |
| to have a voice in developing your operating | | | | Forming your own Real Estate Investment Club can |
| agreement. In this way, the entire membership will | | | | be an exciting social event that you will actually look |
| know starting out just what is expected of | | | | forward to. Some clubs, at meetings with a light |
| themselves and the others. Once you have laid the | | | | agenda, will play the Robert Kiyosaki Cash Flow |
| foundation for your club, you should put it together | | | | Game 101, which actually teaches you how to invest. |
| into a formal partnership agreement that will be | | | | You will gain the knowledge of the other participants |
| distributed to each member. Partnership agreements | | | | who will complement the others. You can solve |
| for investment clubs are available on-line, along with | | | | liquidity problems by bringing in a financial money |
| numerous accounting forms and spreadsheets to help | | | | partner. Solve the construction problems by having a |
| you keep track of your money and investments. | | | | contractor as one of the members. Fill your club with |
| Some clubs have even taken it to the next level and | | | | members that will pick up the slack where you are |
| formed an LLC or S Corporation to protect the | | | | the weakest and you will have a successful means to |
| assets of the club. In the event any one individual is | | | | creating wealth for yourself and your family. |
| sued outside of the club, this could potentially | | | | |