Status: U Return-Path: Received: from noehlo.host ([127.0.0.1]) by mx-pigeons.atl.sa.earthlink.net (EarthLink SMTP Server) with SMTP id 1kjSuFR73Nl34g0; Fri, 18 Jul 2008 12:07:41 -0400 (EDT) Received: from wsmarth-goshawk.pas.sa.earthlink.net ([207.217.120.227]) by mx-pigeons.atl.sa.earthlink.net (EarthLink SMTP Server) with ESMTP id 1kjSuF1De3Nl34g0 for ; Fri, 18 Jul 2008 12:07:41 -0400 (EDT) Received: from domrl-ground.atl.sa.earthlink.net ([207.69.231.199]) by wsmarth-goshawk.pas.sa.earthlink.net with smtp (Exim 3.36 #4) id 1KJsUe-0003SQ-00 for merileek@earthlink.net; Fri, 18 Jul 2008 09:07:40 -0700 X-ELNK-Loop: merileek@kerncommunications.com Received: from dukecmmtar02.coxmail.com ([68.99.120.49]) by domrl-ground.atl.sa.earthlink.net (EarthLink SMTP Server) with ESMTP id 1kjSux5XO3Nl5vF0 for ; Fri, 18 Jul 2008 12:07:33 -0400 (EDT) Received: from merilee07cf8a9 ([68.15.13.44]) by dukecmmtar02.coxmail.com (InterMail vM.6.01.06.01 201-2131-130-101-20060113) with SMTP id <20080718160402.ZJRB17033.dukecmmtar02.coxmail.com@merilee07cf8a9>; Fri, 18 Jul 2008 12:04:02 -0400 Message-ID: <045001c8e8ef$e5858620$0201a8c0@merilee07cf8a9> Reply-To: "Merilee:::Kern Communications" From: "Merilee:::Kern Communications" To: , Subject: RealtyTimes Placement Date: Fri, 18 Jul 2008 09:04:02 -0700 MIME-Version: 1.0 Content-Type: multipart/related; type="multipart/alternative"; boundary="----=_NextPart_000_044C_01C8E8B5.38DCD3E0" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2900.3138 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.3198 X-ELNK-AV: 0 X-ELNK-Info: sbv=0; sbrc=.0; sbf=00; sbw=010; This is a multi-part message in MIME format. ------=_NextPart_000_044C_01C8E8B5.38DCD3E0 Content-Type: multipart/alternative; boundary="----=_NextPart_001_044D_01C8E8B5.38DCD3E0" ------=_NextPart_001_044D_01C8E8B5.38DCD3E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable http://realtytimes.com/rtpages/20080718_investorreport.htm?open&ID=3Dserv= iceone.htm =20 PLAY VIDEO Investor Report: When Partnerships Fail=20 by Kenneth R. Harney We all know that down markets can offer great opportunities for = investors looking to pick up properties at rock-bottom prices.=20 But they can also be troublesome for investors who bring in friends and = relatives to buy properties through partnerships without thinking = through all the potential issues.=20 Robert Jenson, founder of the Jenson Group in Las Vegas, sees the = fallout all the time: Friends or business associates spot a foreclosure = with a low price, good location and solid prospects for rental cash flow = and appreciation -- or so they believe.=20 They put together a loose partnership to buy the place. Then things = start to unravel. Up front repairs, remodeling and pre-rental capital = costs run thousands of dollars higher -- and take longer to complete - = than the partners anticipated.=20 The local rental market turns out to be softer than they expected, so = the house or condo sits empty for months, further bleeding the partners' = cash. Worse yet, real estate values in the area continue to tank, and = the property is now worth less than the partners paid. There's no end in = sight.=20 Soon the negative cash flows get so intense that one of the partners = wants out - fast - but the other partner can't handle the going = expenses. And the partnership agreement has no provisions for a = situation like this.=20 Jenson, who brokers high-end Las Vegas condos and houses to investors = and owner-occupants, told Realty Times in an interview last week: "Too = many investors are going into these (foreclosure and short-sale) deals = using partnerships that are poorly thought out."=20 "If your partnership agreement doesn't deal with an extensive list of = 'what-ifs'," he says, "you're putting yourself at serious risk."=20 Jenson says partnerships or LLC (Limited Liability Corporation) = agreements need to cover real-life problems such as:=20 a.. Provisions for a buyout of one partner's share by the other.=20 b.. Who's primarily responsible for management issues related to the = property, or as Jenson puts it, "who gets the call?"=20 c.. What's the exit strategy? How are the partners supposed to get = back their money over time?=20 d.. How do disputes between or among partners get resolved? What if = one partner wants to sell and the other wants to hold, but can't afford = to buy the whole property?=20 Jenson says good agreements aren't solely about drafting legal language. = "You've got to sit down first with a knowledgeable real estate = professional and go over the practical issues and long-term objectives = point by point."=20 "Then go to a lawyer and get the agreement drafted to fit your = strategies and needs," he says.=20 Published: July 18, 2008 ------=_NextPart_001_044D_01C8E8B5.38DCD3E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable http://realtytimes.com/rtpages/20080718_investorr= eport.htm?open&ID=3Dserviceone.htm
 
 
<= /DIV>
 
 
Investor=20 Report: When Partnerships Fail
by Kenneth R. = Harney

We all know that down markets can offer great = opportunities=20 for investors looking to pick up properties at rock-bottom prices. =

 

But they can also be troublesome for investors who = bring in=20 friends and relatives to buy properties through partnerships without = thinking=20 through all the potential issues.

Robert Jenson, founder of the Jenson Group in Las = Vegas,=20 sees the fallout all the time: Friends or business associates spot a = foreclosure=20 with a low price, good location and solid prospects for rental cash flow = and=20 appreciation -- or so they believe.

They put together a loose partnership to buy the = place. Then=20 things start to unravel. Up front repairs, remodeling and pre-rental = capital=20 costs run thousands of dollars higher -- and take longer to complete - = than the=20 partners anticipated.

The local rental market turns out to be softer = than they=20 expected, so the house or condo sits empty for months, further bleeding = the=20 partners' cash. Worse yet, real estate values in the area continue to = tank, and=20 the property is now worth less than the partners paid. There's no end in = sight.=20

Soon the negative cash flows get so intense that = one of the=20 partners wants out - fast - but the other partner can't handle the going = expenses. And the partnership agreement has no provisions for a = situation like=20 this.

Jenson, who brokers high-end Las Vegas condos and = houses to=20 investors and owner-occupants, told Realty Times in an interview last = week: "Too=20 many investors are going into these (foreclosure and short-sale) deals = using=20 partnerships that are poorly thought out."

"If your partnership agreement doesn't deal with = an=20 extensive list of 'what-ifs'," he says, "you're putting yourself at = serious=20 risk."

Jenson says partnerships or LLC (Limited Liability = Corporation) agreements need to cover real-life problems such as: =

  • Provisions for a buyout of one partner's share = by the=20 other.

  • Who's primarily responsible for management = issues related=20 to the property, or as Jenson puts it, "who gets the call?"

  • What's the exit strategy? How are the partners = supposed=20 to get back their money over time?

  • How do disputes between or among partners get = resolved?=20 What if one partner wants to sell and the other wants to hold, but = can't=20 afford to buy the whole property?

Jenson says good agreements aren't solely about = drafting=20 legal language. "You've got to sit down first with a knowledgeable real = estate=20 professional and go over the practical issues and long-term objectives = point by=20 point."

"Then go to a lawyer and get the agreement drafted = to fit=20 your strategies and needs," he says.

Published: July 18,=20 2008

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