THE SECRET TO FINDING JOINT VENTURE PARTNERS!
One of the biggest problems budding renovators have is that they either don't have enough cash or they don't have enough borrowing power to purchase a property and pay for the renovations. So, what is the solution? Why not use other peoples money?
Although it might be uncomfortable for a lot of people to approach friends and family about business and money it can be a fantastic win-win way for you and your partners to make some great income from property and is a way for you to really scale your property projects without having the income to match.
There will also be people reading this that have high incomes and lots of cash/borrowing power but don't have the time to take on their own property project. In this case why not partner with someone who has more time and experience in property but may not have the funds to take on more projects?
Finding good JV partners is an absolutely vital skill for those of you wanting to make BIG profits from property. This article looks at our four key points to focus on if you want to find good mutually beneficial JV partners.
1. Know your attributes
It is important that you are aware what you can bring to the table. If you are employed and earning a high salary you probably have a good level of service-ability. If you have a lot of savings or equity in your principal place of residence maybe you can offer cash? If you have completed a few projects then you can probably offer your experience and knowledge. If you are just starting your property journey and have little experience or funds to offer then a good starting point would be to read up on renovating and maybe take a renovation course so that you can approach potential JV partners with knowledge and a plan of attack. It is much more likely for you to find a partner to fund your projects if you can present a detailed proposal to them.
2. Have a plan
Following on from the last point if you do not have enough cash or service-ability to fund your own projects or you want to grow your property business and scale up then you will need to find new partners who can help with the finance. When you are looking for JV partners you need to have a clear plan of attack and a well composed proposal that you can give them. Your proposal should outline your plan and include details such as cash required, project details, project timeframe, estimated profits, return on investment etc. We have had a couple of occasions where we have had to approach friends and family to become partners on projects and I am certain that if we did not present such a detailed plan we would have found it much harder to find someone willing to invest in us.
3. Find a win/win
This point is incredibly important. When you are looking for a JV partner you need to make sure you are not only thinking of yourself. You need to always have the other party's point of view in mind and you need to make sure that the deal you put together will deliver on their goals as well as yours. Going into a JV partnership with this mindset with help make sure there are no issues down the track.
4. Be reasonable and fair
This one can be applied to any deal you put together in your life and not just a property JV. As mentioned above you should always have the other party's point of view in mind when you are approaching any negotiations or discussions around a JV partnership. If all parties in the JV are reasonable and fair to each other then there is no reason why a single JV project can't develop into a long and mutually profitable relationship.
Thank you so much for reading! As always this article is based on our experiences and point of view and should always be read as such!
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