Multiple investors on a single piece of property is nothing new. Having different people invest is a great way to free up your funds and minimize your risk in the investment. However, in real estate, having multiple investors can also create headaches. It does not matter if it’s your brother, your best friend, people you’ve known your entire life or whatever, deals fall through and things happen. 

You want to and need to protect yourself in all your investments. Real estate is a great example of one and a common mistake is made by investors. Make sure your name is on the deed if you are investing in real estate. It does not matter how close you are to the property or the owners, if you are giving them money towards that property, your name needs to be on it. 

It’s Good To Have Investors, But….

You have $50,000 saved and you are trying to buy a house that you can live in. You’ve done the math and you can afford the monthly payments but the problem is you need to put $100,000 down to get the house. You bring in another investor, someone who can spot you the cash. That’s great but now comes the big question, what do they want in return? Are they looking for a place to crash? Do they want the money back quickly or are they willing to wait until you sell? 

You have to know what they want as far as terms go and you have to look at what’s available that works best for you as well. If you are looking at a property for yourself and you need someone else’s financial help to get it, it may be better to look at a smaller property. Primary residences should either be owned by you or you should be paying someone rent where you have minimal responsibility to the property. 

Be Careful Investing With Friends & Family 

You can trust friends and family with almost anything, except money. It’s not even that the investment can go bad or have issues. Everything can be going great. The problem could be, which happens a lot, where one of the investors really needs money for whatever reason. How can they get their money back on a property you just purchased six months ago? 

Once you give someone money for a real estate investment you may not expect that money back for years, and you should never expect it back in the short-term. However, every year people will invest money into real estate deals and then have a difficult time managing without those funds. You do not want to be in a spot where you’re either missing that money or telling a friend you can’t help them because the money is stuck in your house. 

Smaller Investments On Your Own

Again, if you want to buy a house but the money is not working right now, it’s best to focus on something you can afford. Condos are a great real estate investment and work well with people who have the financial ability to purchase a house, but are either short on the down-payment or simply do not want to cover the upkeep on the property. 

Realtor Recommendations 

Speaking with a realtor about what the options are is a smart plan. They can tell you what property is worth investing, perhaps with multiple investors, and what your best options are right now. As you are looking at the properties that best suit you, rely on your realtor to determine if investing with other parties is a smart idea. 

Some real estate deals include multiple investors and have had great success with doing so. However, when it comes to investing your money in real estate, always make sure your name is on the deed. It does not matter if you trust the person or not, these are long-term deals and things change.