I have friends that are interested. Can we invest as a team or a Company?

by Ben
(Toronto, ON)

Hi There.
Thanks for great website with so much info.
I have couple of friends and all of us are interested in investing. None of us can afford to buy a rental unit but we are considering doing it as a team. Could we/should we do it as a corporation for limited liability for each participant? Does it make sense? And should it be a property management company or construction or ...?

Thank You So Much

Comments for I have friends that are interested. Can we invest as a team or a Company?

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Aug 10, 2012
 RE: I have friends...
by: Tom Karadza

Sure, yes, that makes sense. You just want to have discussions with a good lawyer and set up a good shareholder agreement between each of you that outlines the details. For example, what happens if there's a leak at your property ... does everyone have to contribute evenly to get it fixed? You need to outline that stuff in advance.

I would highly recommend speaking to a good real estate lawyer before you go down any sort of partnership or corporate structure.

It doesn't matter if it's a "property management" company or "construction company" ... your accountant will deal with how taxes are filed for the company. But depending on the type of investing you're doing your tax rate in a corporation for property may be higher than you anticipate....speak to an accountant about this before you begin.

Tom.

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