The image of the reflected glass globe symbolizes corporate success. However, to me, it also suggests sustainability, morality and social conscience. These are some of the core values I will strive to include.
Owning a successful company, no matter how it generates money, means several things to me.
1) It will bring financial freedom. This means I will not be reliant on managers and CEOs, in whom I have little faith, for my livlihood. In the traditional employment framework, one mistake, one economic upset, or one failed product could endanger my ability to provide for myself and my family.
2) Being free of the ‘rat race’ should also provide more time for family, learning, and volunteer work.
3) If all goes well, there should be enough capital and contacts to branch out into entirely differnet businesses (e.g. restaurants or bars, waste clean-up and reduction, clean and renewable energy technologies).
This is the hard part. I’ve touched on various issues in the preivous Road Ahead posts. There are several steps to setting up a corporation for real estate investing.
1) Determine the corporate structure (LLC, REIT, etc.), then incorporate, quickly.
- Currently, I think the incorporating as a numbered company may be the quickest option, and converting to an REIT in the future would still be possible. Given the new taxation rules for income trusts, it may not be advantageous to go that route.
2) Solidify partnerships, and set a board of directors.
- I can not run this company on my own. I need 1-2 dedicated partners.
- I also need a support team (accountant, lawyer, property manager, etc.)
3) Investigate investment opportunities
- This is the easy part, and will be ongoing
- Having a few potential investments on the board will make it easier to find prospective partners as it will give me some hard numbers to present
4) Develop marketing materials
- A snazzy name
- Powerpoint presentations
- A short flyer
- Business cards
- I need information to present to prospective investors
5) Continue to develop a network of investors (this may have some impact on (1)).
- My current network consists mainly of friends or relatives. This has more disadvantages than advantages, and may pose a serious roadblock
- I will need to expand to other real estate professionals through my current contacts and other networking opportunities
6) Collect investments, issue shares, determine dividend rates, etc.
1) Do I currently have enough investors for this type of venture? How feasible is it all?
- Depending on the amount of investment capital I feel I can secure, my options could change. If it is under $50,000, the simplest investment would be rental property under a non-incorporated partnership. Hopefully the first property will be something commercial, however, because I would like to diversify my current holdings.
2) I am not sure about partnerships at this time. I have approached several people in the past, some have already invested, but I am not sure if I can find a partner who is willing to give time to the venture.
Obviously this will not happen over night. The process will take up the better part of the next year as I slowly move through the steps that are roughly outlined above. However, I remain positive that this is possible with the right marketing strategy, the right partners, and some luck.
I hope you have a happy New Year!!! May 2007 be prosperous and joyous for you and your family.
Part of the writing project over at BiggerPockets.