Successful investors know the importance of partnering with others. Most often investors seek money partners to fund their deals. Structuring the transaction is often the question on the top of the list for real estate investors. Here's how...

Here's a way to get your money partner in a position to move fast when the right real estate deal comes along. Access to funds is often an obstacle than can mean the difference of closing a fantastic deal to losing the deal.

Structuring Access to Money Parnters' Funds

I've seen real estate investors loose several deals because their money partner was unable to transfer the necessary funds to close the deal. It is critical that you can have access to those funds within a couple of days for those last minute motivated sellers that decided to sell just before the sale.

I prefer to have my money partner move the funds they intend to invest into a Money Market Account with a large well-known securities dealer. Any of the major brokerage houses offer money market accounts. The Money Market Account will allow access to those funds with a checkbook and credit card.

Your money partner will simply write a check to the title company or closing attorney for the amount borrowed or they could wire the funds directly to the escrow account. Your money partner would only have one account for all of their funds. Each deal would receive a distribution from the money market account and the terms could vary on each deal.

Should I be listed on the money market account?

No. You would increase your exposure to liability.

But I feel I'll have more control if I'm on the account. What if the Money Partner changes their mind?

Money partners are individuals that can change their mind and they will. Having access to those funds directly doesn't avoid the problem. If the money partner isn't aboard with your ideas, investment strategy or decides to invest elsewhere, being on the account will not help your cause. You should look to lock in the money partner.

What if I guarantee them 10% on the entire balance but I'm only using a portion of those funds? Should they write me a check for the entire balance and I hold the funds in my account until I find the deals?

Absolutely not. You should not hold unsecured funds of the money partner in your personal account. If you agreed to pay the money partner 10% APR on the entire funds and you feel this is necessary, follow these steps.

• Never take the money personally.
• Have the money partner cut a check to the closing attorney or title company for each deal individually.
• On the unused portion of the funds that remain in the Money Market Account, pay the money partner the difference between the rate the MMA is a paying and the 10% you promised them

This will save you a lot of headaches from the bookkeeping aspect and money management perspective.

Utilizing a Money Market Account is an easy way to access the funds for those last minute deals. It works for the money partner and the real estate investor.