Are you interested in real estate investing or even commercial real estate investing but don't have enough capital? Should you wait until you have enough money for the investment amount that you want?
The problem is that you may never save enough for your investment objectives. Your funds could always fall short. One solution that you can try is to go for group investing.
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This is when a group of investors pools their money to buy an asset. The asset can be anything from shares to properties—as long as it is a wealth-building asset, they can include it in their portfolio.
This practice has been around for a long time. Wealthy people have always pooled together their resources to generate even more wealth for themselves, which was the origin of the first corporations.
The Dutch East India Company was a company that was established so investors could share in the wealth from trading with the Dutch colonies in Asia and is a good example of group investing.
In more recent times, people might remember the so-called stock clubs which became popular in the 1980s. However, modern group investing is a lot more diversified now. There is a lot more analysis involved in the investment because sound financial advice is more readily available today.
Group investing is not just involved with the stock market. In fact, group investors are more interested in real estate and properties now, while some are even investing in artwork.
Now that you have the option of group investing in front of you, how do you get started with it? We have listed a few guidelines that you can follow.
The first step is to find or build your investment group. Some people do not want to invest in their friends and family. They say that money matters can ruin relationships and they're right because in some cases, money disputes can cause a falling out, even among family members. However, there are also those who believe friends and family are the best co-investors.
It's really up to you if you invite your friends to join you. Some prefer to join a group of seasoned investors as that will make more sound financial choices and others prefer to be their own analysts.
The important thing is for you to find a group that you can be comfortable with.
One of the problems of group investing is that people might disagree with the decisions being made.
To avoid this, you need to hold regular meetings so that everyone in the group will be aligned. All the members of the group should be aware of the decisions being made.
You cannot start your investment group without having some kind of agreement that binds everyone. You need to come up with an operating agreement that contains the names of all the members of the group and the terms you have.
It should contain the types of investments your group will cover, from securities to companies. You can go back to the document whenever you have disagreements and misunderstandings.
The next step is to start a limited liability company (LLC) which will be the one to conduct the actual transactions on your behalf.
Now, it's time to pool your money together. This is very crucial because this is when you find out how much money your group will have and it will have an impact on your investment decisions.
Remember, the money pledged by the members initially is not always the amount that they end up investing.
The next step is for you to find a good deal for your group. If one of the members is a trader or broker, then that is a huge advantage. What's important is that the decision should be made based on sound financial planning.
Everyone should be in agreement with the decisions made and should be aware of the target average for the profits to be made.
This is basically group investing in a nutshell and if you're thinking of starting a group investment, our team of financial experts can guide you through the process.
Moreover, you can put money into a dependable, well-balanced portfolio of real estate assets with our team. Modern technologies and internal experience are combined to maximize your investment.For more information on real estate investing or commercial real estate investing, and to learn how you can make the most out of your money, contact us at 949-881-7128 at Saint Investment Group today!
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.