if i am beginning with a small JV with one person who wants in with me as a "silent money partner"... when i pursue a mortgage, am i pursuing this mortgage in my own name normally? down payment money from jv partner, and mortgage in my name? or will the lender want both names on the mortgage document since it is a partnership?
For a Small JV - Who Holds Mortgage?
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QUOTE (selewis @ Feb 23 2009, 09:41 PM) if i am beginning with a small JV with one person who wants in with me as a "silent money partner"... when i pursue a mortgage, am i pursuing this mortgage in my own name normally? down payment money from jv partner, and mortgage in my name? or will the lender want both names on the mortgage document since it is a partnership?
usually just you, and as a "silent partner" I would NOT want to be on mortgage as I could lose more than I invest due to personal recourse in most provinces except AB.
usually just you, and as a "silent partner" I would NOT want to be on mortgage as I could lose more than I invest due to personal recourse in most provinces except AB.
looks like it`s time to start the next learning curve. for our first 10 properties, we have been able to put them all in our own names, using CMHC or not as seemed fitting in each case. now, with being told "no" by CMHC, we are going to have to re-create our strategy for the next phase of investing. i am happy to bring others on board. just don`t know how to do it! done it all with our own money (or LOC), done it in our own name, and done it for our own sakes, so far!
so, thanks, thomas, for my first mini-lesson to begin phase 2.
and by "personal recourse", i assume you are referring to the lender`s ability to come after more than just the collateral that is in the house itself to fulfill any debt obligation should the borrower default...??
so, thanks, thomas, for my first mini-lesson to begin phase 2.
and by "personal recourse", i assume you are referring to the lender`s ability to come after more than just the collateral that is in the house itself to fulfill any debt obligation should the borrower default...??
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QUOTE (selewis @ Feb 23 2009, 10:53 PM) looks like it`s time to start the next learning curve. for our first 10 properties, we have been able to put them all in our own names, using CMHC or not as seemed fitting in each case. now, with being told "no" by CMHC, we are going to have to re-create our strategy for the next phase of investing. i am happy to bring others on board. just don`t know how to do it! done it all with our own money (or LOC), done it in our own name, and done it for our own sakes, so far!
so, thanks, thomas, for my first mini-lesson to begin phase 2.
Phase 2: consider moving all these 10 properties in a corporation, i.e. start with a clean personal balance sheet for the next 10.
Also, consider selling one or 3 assets to show some REAL PROFIT .. not just on paper .. to build a track record for new investors and to show the bank. This should be done in the corporation, so the corporation now has some real cash, and not a negative equity due to depreciation and book values far below real values. Since the market valuations are somewhat iffy right now, bring them in at the low end of the range of "value" as you have some discretion here. Then sell 1, 2 or 3 .. pay your taxes but leave most of this cash in the corp for add`l purchases, inside the corp. .. or dividend it out for purchases outside the corp., depending on your Phase 2 strategy !
QUOTE (selewis @ Feb 23 2009, 10:53 PM) and by "personal recourse", i assume you are referring to the lender`s ability to come after more than just the collateral that is in the house itself to fulfill any debt obligation should the borrower default...??
right ..
so, thanks, thomas, for my first mini-lesson to begin phase 2.
Phase 2: consider moving all these 10 properties in a corporation, i.e. start with a clean personal balance sheet for the next 10.
Also, consider selling one or 3 assets to show some REAL PROFIT .. not just on paper .. to build a track record for new investors and to show the bank. This should be done in the corporation, so the corporation now has some real cash, and not a negative equity due to depreciation and book values far below real values. Since the market valuations are somewhat iffy right now, bring them in at the low end of the range of "value" as you have some discretion here. Then sell 1, 2 or 3 .. pay your taxes but leave most of this cash in the corp for add`l purchases, inside the corp. .. or dividend it out for purchases outside the corp., depending on your Phase 2 strategy !
QUOTE (selewis @ Feb 23 2009, 10:53 PM) and by "personal recourse", i assume you are referring to the lender`s ability to come after more than just the collateral that is in the house itself to fulfill any debt obligation should the borrower default...??
right ..
QUOTE (thomasbeyer2000 @ Feb 24 2009, 01:02 AM) usually just you, and as a "silent partner" I would NOT want to be on mortgage as I could lose more than I invest due to personal recourse in most provinces except AB.
what about on title? if the money partner is not on mortgage, then does that mean they are not on title either?
what about on title? if the money partner is not on mortgage, then does that mean they are not on title either?
i understand the mortgage company wants whoever is on title to be on the mortgage as well. can you ever add someone on title after the fact? not necessary i assume? (my JV partner is asking all kinds of questions that i am trying to answer!).
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It really comes down to where the downpayment is coming from. If you can provide confirmation of the down payment funds, then you will be able to qualify on your own.
If you want to add someone to the title `after the fact`, the bank would normally require and application on the person, but I think you`ll find many members have done this by notifying the bank, and the bank didn`t ask for anything further. Some of these instances are very inconsistent across the different lenders.
You can have someeone guaratnee a mortgage and not be on title (might dffer in each province), but you can`t be on the title and not on the mortgage. There are expamples where a client was added to a title, the notification went to the bank, and they did not follow through from their end. Not really a clean way to proceed though.
If you want to add someone to the title `after the fact`, the bank would normally require and application on the person, but I think you`ll find many members have done this by notifying the bank, and the bank didn`t ask for anything further. Some of these instances are very inconsistent across the different lenders.
You can have someeone guaratnee a mortgage and not be on title (might dffer in each province), but you can`t be on the title and not on the mortgage. There are expamples where a client was added to a title, the notification went to the bank, and they did not follow through from their end. Not really a clean way to proceed though.
How about this:
1. Create a Limited partnership
2. Put partnership on on the title and on the mortgage
3. Make yourself General Partner, and the silent partner (who doesn`t want any risk/responsibility) would be Limited Partner.
Make it clear in your Partnership agreement that you are responsible for all management and mortgage payments, not the investing partner.
1. Create a Limited partnership
2. Put partnership on on the title and on the mortgage
3. Make yourself General Partner, and the silent partner (who doesn`t want any risk/responsibility) would be Limited Partner.
Make it clear in your Partnership agreement that you are responsible for all management and mortgage payments, not the investing partner.