Should you be looking to partner on a deal with an experienced real estate investor? A joint venture in real estate can help you jump start your investment business.
Like some of you, I love TV shows about real estate. Anything about buying, selling, investing, and those about general home improvement. HGTV’s Flip or Flop is my favorite to watch for the sheer entertainment value (as I trust those results about as far as I can throw them).
If you haven’t seen the show, hosts Tarek and Christina buy, renovate, and sell homes in Orange County. Each episode features a different house and a totally new situation. It’s beautifully edited to give the perception that every deal was profitable and every decision great and anyone can do what they do without ever losing money.
The reality is that flipping a house or doing a deal can be much more complicated with many pitfalls blocking your success.
Regardless, maybe Flip or Flop or another show roped you into the idea of real estate investing. You’re excited to get out there and try your hand at your first deal. If you’re not yet at the level of a Tarek or a Christina, you might realize you need a partner to help you finish a real estate deal.
A great structure for doing these types of deals is a Joint Venture (JV) in real estate because you can gain experience while working with professionals who can help you learn the ropes.
What Can You Tell Me About a Joint Venture In Real Estate?
Flip or Flop is a good example of a real estate joint venture. In the show, Tarek and Christina work together to find, renovate, and sell homes for a profit. A JV is an agreement between two (or more parties) to work together to complete a deal. Each episode is like a JV between Christina and Tarek. Christina works on design and project management while Tarek scouts the deals. At the end of the project, they split the profits and go to the next deal.
If you had the chance to ride along with Christina and Tarek would you?
This would be a great way to gain a lot of experience in how to find good deals, how to manage a project, and how to successfully sell. This is what we do here at REI Consulting. We form JVs for single projects to help investors like you close profitable deals, while working alongside local pros.
Watch my video where I talk more about JVs here.
What Do I Need To Know About a Joint Venture?
One of the most important things to know is that JV is a one-time partnership. We only work on one deal and take that deal from start to finish. Remember, like Flip or Flop, a JV is just one episode. After our deal finishes the JV ends and you can take your profits and go on your way.
In a JV we make a deal, set the terms, decide how to split the profits, sign a contract, and work together until our contract is finished.
People usually do a JV to learn about investing, raise capital, access local expertise, finish a difficult deal, or leverage a firm’s connections.
What Can I Get From Making a Joint Venture?
Like Flip or Flop, a JV gives you the opportunity to be in the driver’s seat of a real estate deal. New investors get a big leg up on their competition by learning with pros who’ve finished deals and who’ve made mistakes. You get to learn what works and what doesn’t, and how to avoid costly mistakes. We get you off the ropes and into the game in one deal.
Here are a few of the major benefits you can get by partnering with us on a JV.
- Learn what it takes to run an entire project from start to finish
- Understand the systems and procedures needed to complete profitable deals
- See each step of a deal, including how we handle the twists and turns
- Get access to our contractors, title agencies, lawyers, and other professionals
- Find better financing options by working with an experienced company like ours
- Connect with our team members
- Learn how to create strong contracts
- Split deals instead of paying upfront consulting fees
What Else Should I Know About Joint Ventures?
A joint venture in real estate has a few moving parts. It’s important to know just what it takes to get started and what will happen during the JV. I break the JV down into four main parts.
- How long the contract will last and how it can end
- Each party’s responsibilities
- Each party’s rights
- The percentage of profits for each party
As an example, we’ll take an episode from Flip or Flop. Like I said earlier, the 30-minute episode would be how long the contract is and how it ends. Christina was responsible for design and project management, while Tarek was responsible for scouting homes. Both Christina and Tarek had the right to know what the other was working on, and they both have access to contractors. Last, both Christina and Tarek split the profits 50-50.
When clients work with us they really get to see the nuts and bolts of a deal. We share our QuickBooks, share emails, work together on contracts, negotiations with title agencies, and with lawyers and contractors. You really have a full view of everything that is happening throughout the JV. We have regular meetings to talk about how the deal is going.
I’m Considering a Joint Venture in Real Estate… How should I get started?
The process begins with you. I recommend that you look at your strengths and weaknesses. Do you have a promising deal but need pros to guide you through the process? Maybe you have a deal but don’t have the local knowledge or contractor connections to get the deal done. This happens more than you might think.
After this, assess your goals. How much time do you expect the deal to take and what is your expected return? Break the deal down. Do research and make a plan before you approach anyone about a joint venture. Then call us to get started.
We can set a time to meet to talk about your joint venture in real estate and how we can work together. We’ve done just about every kind of JV you can think of, and we’d be happy to help you structure a joint venture in real estate to meet your needs. Jump into the game with a joint venture in real estate.
