Wednesday, May 25, 2005

Real Estate Investment Club

Dear Readers,
I've been talking, for a long time, about starting a real estate investment club. Everyone I've talked with thinks it's a great idea, but I just haven't taken the legal steps to get it organized. Would we need to limit it to Wenatchee real estate, or expand into other markets?

You've, no doubt, heard about the stock investment club craze of the 1990's... so I want to carry this over into the real estate arena. The idea is the same, several people put in a little bit of money each month to make investments.

I served as President of a Women's Stock Investment Club and am familiar with the concept and function. It's a little more complicated than a stock investment club because of the dollars involved. We'd have to figure out a way of calculating value on a month to month basis, especially if we accept members after the initial start-up. In our stock investment group, we had a cap on the number of members (20) and only accepted members once a year, if there was an opening. You could only discontinue membership, with notice, once a year. After being notified of an upcoming opening we would replace that member. The departing member would receive their accumulated value pay-out 3 months following their departure. Their membership would terminate December 31 and the pay-out would come March 31. New members join on January 1st.

It would be too complicated having members coming and going during the year... but a person could potentially sell their position in the club if they needed to liquidate fast. We never had this happen, but I think it should be alright, if the incoming member meets any other criteria for membership.

What could happen if we got 100 investors putting in just $25 per month? We'd have $2500 per month to invest. If those 100 could put in just $100 as start-up money, we'd have $10,000 seed money to start.

We'd probably have to start with some lease/purchase type contracts until we accumulated enough money to actually buy something... but there's money to be made there too, and less liability.

Just throwing it out there to see how much interest there is. If there's enough interest, then I can work out some of the details and get it going. I need your questions and feedback, so I can address all the issues that would go along with this kind of an undertaking.

Give it some thought...

Have a great day!

Realtor, ABR, e-PRO, GRI, RECS, REI
Serving all of Washington State
Specializing in Wenatchee & Surrounding Areas
Phone: 509-670-7840 * Fax: 419-818-4009

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