Are you trying to push your real estate investing to a new level?
Typically, the reason for creating a joint venture or partnership is to grow a real estate portfolio more quickly. It might be because partners could complement your skills, a bigger deal could mean greater financial incentives, you’ll be sharing liabilities, and it will allow you to take on investment opportunities that you wouldn’t otherwise consider.
You’re probably aware of how a joint venture works. The parties sign an agreement that outlines the elements of the joint venture–the objectives, financial contributions of each member, division of management responsibilities, how profits will be split, etc.
It’s important to be clear about your own real estate investing goals before you consider a joint venture or partnership. Everyone has different goals around money. And, I’ve met a lot of real estate investors who are miserable because they aren’t a good match with their partners, or their agreements aren’t clear, or BOTH. When the time comes to distribute the profits, all h*ll breaks loose.
Before initiating a joint venture, ask yourself these questions:
– Do I need a partner and why?
– What value would I add to a partnership?
– What are my core values?
– What is my timeline?
– How involved do I want to be?
– Am I seeking anything beyond a financial return? What is it?
How you answer these questions will help you choose a partner or joint venture that fits your needs and goals.