To Answer this question first we need to look at what a joint venture is.
Let’s define exactly what a Joint Venture [JV] is?
“A mutually beneficial and profitable joint enterprise where opposing skills or benefits are leveraged.” [Thanks Wikipedia]
A Joint Venture [JV] is a venture between two or more people. In property investing, the joint venture is usually based around an individual who has time or experience, working with someone who has little time but has funds.
JV’s also occur when the following exist;
Complementary or opposing skill sets: one partner is an expert marketer or negotiator in trade for the partners’ mortgage-ability, mortgage hosting, refurb or management
skills.
Cash & time: One partner is cash-rich, but time-poor; the other is time-rich, but cash-poor.
Time & experience: one partner has lots of experience, but little time; the other has lots of time, but little experience.
Experience & cash: one partner has lots of experience but no cash; the other has lots of cash but no experience.
Why We Use Investor Finance and JV Partners?
Using a Joint venture partner is one of the most efficient ways to build up our property business in a short period of time with minimal risk. JV's increase our buying power & reduce the time it takes to build our portfolio. As with any business we use investors money to grow and develop.
Investors and JV partners bring business experience and knowledge - A lot of private investors have business experience that they can bring to the table. This can be very beneficial to us and over the years we have learnt a lot from our investors. We often getting to work with serious, wealthy, knowledgeable and experienced business people which is often more valuable than getting the funds themselves and helps us grow as a business and an investor.
There is a saying in property that 'your network is your ‘net-worth.’ While we dont love the saying there is truth in it. JV partners often have a huge contact base, we find that one JV partner will often lead to another JV partner.
Our favourite benifit of JV Partners is that is allows us to do Multiple Deals at one time. We have our own pot of funds, that are added to on a regular basis so are not solely reliant on JV partners, however JV investors all us to grow our business very quickly as we are able to take on multiple deals at any one time.
The more deal we can get increasing our credibility with our network of Agents and improves our ability to attract the best, ‘bottom drawer’ deals. Getting better results for all.
Scalability – Investors allow us to take the business to the next level with our ability to attract finance we can grow faster together than alone.
Working with investors gives us greater control, we have choices when we can attract money. We can quickly cash in on trends allowing us to be more profitable.
Ultimately working with investors and JV partners means, together we achieve greater wealth, with lower risk, in shorter time, while learning from each other. Making a 'win win' partnership.
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