The rental situation for Landlords and their heirs is deteriorating. Tenant issues, confrontations, vacancies, tenant unions and increasing expenses have always been issues and now there is a large and increasing incursion of government regulations into rental ownership and tax codes that change like the weather.
Landlords can be stubborn. So 25153.net reaches out to them through their advisors – accountants and attorneys who have never seen a joint venture as a solution to the problems – basically eliminating the issues in exchange for selling a minority share in the property future to a “Covestor” vetted by Covest and selected by the Landlord. There is no loan requirement placed on the Covestor.
The role of the landlord switches from active to passive and he is called “Investor”. THE ”25-15-3” DESIGNATOR DESCRIBES THE RELATIVE COSTS OF THE EXIT STRATEGIES – SALE, DELAWARE STATUTORY TRUST AND THE COVEST JV.
Landlord and rental property problems are ended because they no longer exist.
Successful negotiation of a memorandum of the transaction and the relationship by the Investor and Covestor is a requirement of the joint venture. Because the “Covestor” is an owner and has “skin in the game,” the goals and conduct of the parties are aligned.
The “Covestor” occupies the property, makes all required payments, performs repairs, and maintains property as an on-site property manager. Ownership is conditioned upon execution and completion of the terms of the agreement. It does not include loan qualification unless the Parties agree. Payments are via a servicing company.
Thus, a property owner, his/her heirs and estate can continue using his/her existing rental properties as a prime investment vehicle BUT without the headaches. The “3” solution dwarfs the costs and results of other exit strategies.
Over 250,000 residential joint venture transactions have closed since 2004 including over 5,000 in California conducted by a Covest consultant.
Joint ventures have been used extensively in business and in commercial real estate. The key is the flexibility of construction. The introduction of IRS code 280a renders equity sharing a legal solution in all states.
25153.net is currently being employed and will be offered in tandem with Acornz.com is specific markets.
Its use in residential real estate has been characterized in the press as “win-win.”