How to Become an Investor

Photo by Scott Graham on Unsplash

1. Contact Matt (the owner of Dwell Logic) and have a conversation about your goals and how real estate investing can help you achieve them. Questions I always ask are: What kinds of returns, cash flow and property do you want? What kind of timeline do you have in mind? How involved do you want to be? This helps me to figure out what property type and which market/region is best suited to your individual needs. Consultations about becoming an investor and/or joint venture (JV) partner are complimentary.
2. Confirm you are financially capable of being an investor or joint venture partner. This is standard due diligence — confirming identity and the lawful source of funds, as any professional capital raiser must. It goes both ways: I will verify my own identity and company with you as well.
3. Review some example deals with me, so you are comfortable with the terminology and understand what you are getting into. This doesn’t have to be a very long and complicated process, but you should expect to spend at least an hour going over the projected returns and Matt’s explanations of exactly what that means for you.
4. Draft either a JV agreement or a loan contract. A lawyer should be the one to prepare this paperwork. I have templates already prepared and a real estate specialized lawyer that I work with. You are of course welcome to have your own lawyer review the paperwork. Many people will want their accountant to review this as well.
5. I suggest current deals I have found or created, and the investor/JV partner picks one or more that they want to be a part of. At this point the agreements mentioned in #4 must be signed before we can proceed and actually make an investment by purchasing real estate.
6. Dwell Logic executes the plan. From that point forward, your involvement is limited to reading periodic email updates and receiving your monthly distributions.

Please note that many real estate investors call their joint venture (JV) partners “investors”. The terms are often used interchangeably in everyday conversation but can have different legal definitions and implications.  In short, an investor simply provides capital, usually via some kind of loan (in Canada often an RRSP funded mortgage). Said loan may or may not be registered on title and does not entail any kind of formal partnership beyond an agreement to repay the loan with specified terms. In contrast JV partners have signed a legal agreement that spells out the details of the business partnership we have formed specifically to invest in real estate. The latter is more sophisticated and does not always automatically dissolve when a property is sold.

All content on this website is copyrighted and the sole intellectual property of Matthew Landsborough and Dwell Logic Investing Inc. For permission to use this content elsewhere please contact matt@dwell-logic.com

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