Joint Venture – MARIN FAMILY PORTFOLIO
The Marin Family Portfolio owners had originally built a portfolio of 11 assets throughout Marin County. The family had more than 30 beneficiaries and had the goal to consolidate its interests and reduce ongoing management of the assets. Additionally, the existing assets needed significant capital expenditure and infrastructure upgrades.
The family’s goals:
- Eliminate ongoing management
- Eliminate liability and financial risk of improving the existing portfolio
- Find a joint venture partner who can provide additional capital and management expertise
- Effectively estate plan
- Create durable income, cash flow plan
- Implement a plan that reduces the dependency on any one trustee’s involvement for the plan to succeed
There were several steps to this joint venture:
- Step 1: Rutherford purchased the portfolio from the family
- Step 2: Rutherford found a set of assets to purchase together with the family
- Step 3: Rutherford and the Marin Family acquired a new set of assets together
- Step 4: Rutherford manages the new assets and provides transparent reporting to all beneficiaries
| BEFORE | AFTER | |
|---|---|---|
| No. of Properties: | 11 | 2 |
| Phase 1 | One family member was responsible for the asset and property management of the assets. There were 30+ beneficiaries that he was responsible to coordinate and support. | Purchased the apartment portfolio |
| Phase 2: | – | Rutherford to sourced 100+ Unit Apartment Building and East Bay MHP |
| Property Type: | Multi-Family | 100+ Unit Apartment Building and 400+ Space mobile home park |
| Property Age: | 40-50 Years | 2001 & 1971 |
| Debt: | Minimal | 10 Years fixed |
| Pre-Tax Cash Flow: | $400,000 | $1,100,000 |
| Post-Tax Cash Flow: | $300,000 | $1,100,000 |
| Management: | Hands-on management | No management |
| Maintenance: | Significant deferred maintenance | Low maintenance |
| Depreciation: | No more depreciation | New depreciation schedule |
| Other: | Much effort to coordinate disposition of assets | Estate planning goals for long-term owners:
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