@JohnGesa Still not bad at Prime - .5 to .9 though. They are calling for rates to stay steady over the winter
These days, most real estate investors know that having no money or credit does not necessarily mean that one can not invest. Enter the joint venture! In The Secrets of Savvy Investors we've talked about what to look for in a joint venture partner, or partnership before. Now let's take a closer look at how a joint venture partnership goes together.
There are basically three aspects to a joint venture deal. The first is control: who will be the one in control of the deal, the point of contact for renters or other vendors - the face of the deal, you might say. Which partner will receive the phone calls, deal with issues and take care of the smaller things needed on a day-to-day basis.
The second aspect to consider is the division of profit. Who will receive how much, and when? In many partnerships, one partner will receive more than the others because they do the "leg work", while another partner may be a "silent" partner of sorts, and has only supplied some capital or credit. Before embarking on a venture, the division of funds must be steadfastly decided, and all partners in agreement.
The third aspect that goes into a joint venture deal is the exit strategy. You may notice that we talk a lot about exit strategies at The Versatile Investor, and for good reason. The exit strategy is one of the most important parts of the investment, and while a good investment property also earns monthly cash flow, the end of the investment is usually the time when the investor or investors see the big payout. As with any investment whether you are JVing or not, you will need to have a clearly-mapped exit strategy. In a joint venture situation, you will not only need to have the exit strategy clearly mapped out, but also have all partners in agreement and committed to the exit strategy, as well as in agreement to revisit the exit strategy if need be before the investment matures.
As always, you should seek independent legal advice before beginning any investment or joint venture to cover your - er... assets. Make sure you protect your own interests, regardless of who your partners are or your current relationship with them. There will need to be legal documents crafted with clauses covering disputes and other "worst case scenario" type situations.
Cover these three bases and then seek your legal advice, and your joint venture partnership will be on the road to profit!
Think you don't have the money to invest in rent-to-own? Think again! Contact us to learn how we can help you partner with others to get you started investing as soon as possible!
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written by Mark Loeffler, January 26, 2010
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This is a well thought out, informative article.
Very good flow.
I like how you broke down the JV into 3 sections.
It was a good read.
Best Regards,
Neil.