Co-Investment Agreement Template

Before forming a holding company or entering into an investment, it is important for co-investors to establish a co-investment agreement among themselves. This agreement helps to avoid or reduce potential disputes that may arise in the future.

As a reference agreement, RICHCO-SPACE provides a co-investment agreement template for co-investors to ease the pooling process. The content of the agreement can be amended or added according to the mutual agreement of the investors. Engaging panel law firms for advice and witnessing the signing of the agreement is highly recommended.

Highlights of the agreement:

1. Actual Purchase Price: While a target price is set for pooling, the actual purchase price may be higher or lower. Therefore, it is important for co-investors to mutually agree on a mechanism to determine the final purchase price.
2. Exit Plan: Co-investors should have an exit plan in place for any co-investment property, which could be based on selling criteria, individual investor plan, or en bloc sales.
3. Rental: Rental income is a major source of income for property investment. Therefore, co-investors should be informed of the market rate and determine the final monthly rent.
4. Renovation: Co-investors should set aside a pool of cash for the renovation of the property, which could be treated as part of the investment sum.
5. Financing of Property: While RICHCO-SPACE recommends mortgage packages, co-investors collectively decide on the bank and mortgage package.
6. Share Distribution & Adjustment: RICHCO-SPACE provides a reference distribution model based on co-investors’ cash and borrowing capacity. The share percentage can be adjusted based on negotiation, and individual share may change depending on future cash contribution.
7. Accounting & Money Management Policy: An accounting and money management policy is crucial for managing co-owned money.
8. Expenses: Co-investors should be aware of regular and ad-hoc costs incurred by the property.
9. Disclosure & Protection of Personal Information: Co-investors should disclose certain personal information to other co-investors, and it is a collective responsibility to protect this information.
10. Disclosure of Conflict of Interest: Co-investors should disclose any family or relative relationships, as well as any relationships with tenants, service providers, or sellers.