Joint Ventures in Real Estate
You found a sweet deal but, be it for poor credit, lack of cash/experience, being over leveraged...you can't get it financed. If you're thinking, how can I realize my real estate investment dreams and goals in spite of the obstacles?
Try a joint venture! Here's how...
1. Form the venture: A real estate investment has many moving parts. Locating, analyzing and acquiring the property requires expertise, money, credit, and more. Minimize misunderstandings from the onset by creating a joint venture agreement that:
a. Outlines the venture's exit strategies (fix and flip, buy and hold, wholesale, etc) and focus (property types, location, etc)
b. Establishes the venture's legal structure
c. Defines the role of respective parties by outlining their roles and responsibilities including who (or what) will:
d. Locate the property
e. Take title to the property
f. Be responsible for access to the property
g. Handle books and record-keeping?
h. Handle rehab and/or resale?
i. Have signing authority with the entity's MANDATORY bank account
j. Explains what will happen in the event of termination or default
k. Clearly defines net profits.
l. Sets out what happens in the event of disagreement. Forced arbitration?
2. Have the agreement reviewed and, if necessary, tweaked by an attorney licensed in your state
3. Open a bank account with all authorized signers in attendance
4. Fund the venture with an infusion of either cash or credit
5. Establish your dream team
a. Real estate broker/agent
b. Title agent
c. General contractor
d. Real estate appraiser
e. Hard money/private lender
f. Mortgage broker
g. Real estate attorney
6. Locate, analyze and acquire target investment
7. Implement exit strategy
8. Repeat the process
Having a legal agreement in place is crucial, not only to the joint venture's success, but because lack of one is sure to create problems in the long run. And like in all relationships, clear communication is key to its success.
RealEstateSuperMarkets.com has secured a trusted partner in the real estate joint venture space! With a $2.5mm minimum, only 10% seed capital ($250k) required, and NO FEES, our partner will provide 90% funding with no credit requirement! Now is the time to kick your real estate objectives into gear! Interested in knowing more? Use the contact form to the right to schedule a non-cost consultation!
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