Why Invest with Dwell Logic?

I get asked this question a lot. So here is a summary of the pros and cons of investing in real estate with Dwell Logic Investing Inc. For more info on how to become a Joint Venture (JV) partner click here.

Photo by Alexandr Hovhannisyan on Unsplash

Pros

• You get to take advantage of Dwell Logic’s years of experience and expertise.
• Dwell Logic’s joint ventures are typically structured so that partner capital is returned first from refinance or sale proceeds, before Dwell Logic takes any profit distribution. Our interests are aligned: we do not earn a capital profit unless our partners do. The specific terms, including how ongoing rental income is shared, are set out in each written agreement. As with any real estate investment, capital is at risk.
• Dwell Logic has sophisticated systems in place that smaller scale landlords don’t have. For example, we have professional property management and accounting software. Another example is our multiple marketing websites and networks that allow us to reach a huge audience of potential tenants and real estate vendors.
• You are able to take advantage of the many savings that come with Dwell Logic’s larger economy of scale. We have access to significant saving opportunities like bulk commercial insurance rates, competitive market interest rates on loans, preferred rates with contractors etc. that are simply not available to smaller, less sophisticated investors.
• Our reputation for well-kept rentals and fair management helps us lease vacancies quickly to well-qualified tenants, which limits income lost to vacancy.
• Dwell Logic finds new properties and deals so you don’t have to. Finding good deals is one of the most difficult aspects of real estate investing. Building up a network of contacts and relationships with other real estate professionals is required to consistently find a steady stream of good deals. It takes years to do this. By partnering with Dwell Logic you get instant access to many of our resources.
• You never have to manage a property yourself! Investors get to avoid the expense of finding and hiring your own property manager and/or the hassle of communicating with tenants at all hours of the day and night.
• You have the opportunity to split the risk associated with the investment with Dwell Logic and any other JV partners. When you invest on your own, you trade a 100% profit stake for 100% of the risk.
• When you invest with Dwell Logic you can reduce your exposure to legal liability. Tenant disputes and evictions are unpleasant, and over a long enough horizon they are a near-certainty for any active landlord. It varies with different JV agreements, but Dwell Logic usually assumes all responsibility for tenant management and adds the properties in question to our own legal liability insurance policy. We can also use legal structures like limited partnerships for individuals that wish to strongly limit their legal liability.

Cons

• You have to split the equity and profits with Dwell Logic and any other JV partners. I love what I do for a living, but just like everyone else I don’t work for free.
• You do not get complete control of the property(s). In most instances, our partners are “passive” investors/partners and will have little to no control of day to day operations. For some folks this is actually a pro, because it means they don’t have to stress about the responsibility. For others, who tend to micromanage or worry, this can be a real issue. The JV agreement always spells out in explicit detail exactly what each partner is responsible for.

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 is simply an agreement to repay the loan with specified terms. It does not constitute a formal business partnership. In contrast JV partners have signed a legal agreement that spells out the details of a formal business partnership, that we have formed specifically to invest in real estate. The latter is more sophisticated and may or may not automatically dissolve when a property is sold. A JV partnership often allows more flexibility for income tax planning as well.