| There are many reasons why you would consider | | | | Don't come out and ask them straight away ... follow |
| joining with another person to undertake a | | | | my ebook, do the work you want to do; that is |
| development project in Joint Venture. | | | | assessing them ... but keep your antenna out for any |
| Usually the most basis reason reveolves around | | | | signs of a common interest. |
| something you don't have. | | | | OK, back to getting hold of some land. |
| Some of them may be: | | | | Get to know the local real estate agents; I mean know |
| 1. I own land ... have capital & capacity to borrow ... | | | | them well. |
| but no experience. | | | | Remember what I say in the ebook. |
| 2. I have capital & capacity to borrow ... partner | | | | Call in and buy them a cup of coffee, take them out of |
| has land ... both have no experience. | | | | their work place;what about dinner after work; really |
| 3. I am 'time poor' ... work full time and can't be | | | | spread yourself around. |
| personally involved ... | | | | Invest your Time in finding good, well informed, |
| Let's suppose you want to find a land owner who will | | | | dedicated agents. Believe me they are in your |
| put their landinto the Joint Venture, (JV) and their land | | | | business community ... it's your job to find them. |
| will be their major contribution to the deal, plus some | | | | Appreciate that Agents are essentially self-employed, |
| borrowings. | | | | irrespective of whether they work in a Real Estate |
| Let's consider the implications of entering into a JV in | | | | Agency ... their 'mind set' is independent. |
| the first place. | | | | They back themselves and their abilities to provide a |
| After all, in a JV you have to take into account | | | | sales service at alevel that "consistantly" provides |
| another persons attitude, decision making process, (or | | | | them with a 'good income. |
| inability to make a decision), whether they have a | | | | That 'good income' by the way, will leave most of their |
| logical and sensible mind ... the list goes on. | | | | 'client's' incomelooking a little anaemic. |
| So, getting into a JV must have a good payback for | | | | The 'good agents' are busy; their 'time' is money; |
| you. Whatever you lack is usually the reason for | | | | literally. So don't mess them around. |
| entering into a JV. | | | | Don't talk to them as though you are the Aga Kahn! |
| I have noticed over the years that JV's have a prime | | | | You're Not. There's always a guy richer than you ... |
| motivator, the driver of the deal (you), and the other | | | | maybe the Agent! |
| person is along for the ride. | | | | Why am I making such a big point about agents. |
| For example: the other party may have a wonderful | | | | I believe "people" get the agents "they deserve." |
| property (site) and wants to develop it, but does not | | | | I have heard people talk to Agents as though they |
| have the knowledge. You "love" the site and know | | | | were some grubby leech on society and are doing |
| that you could make it a very successful and profitable | | | | them an honor even to talk to them. |
| real estate development. You approched the land | | | | To be a successful agent these days you have to be |
| owner. | | | | very good. Many are highly educated and choose real |
| Another example: maybe two individuals who have | | | | estate as a career for the freedom,individual reward |
| saved their capital, however individually it is inadaquate | | | | and great returns. |
| to undertake a project. Combining their capital and | | | | What comes out of your mouth + body language tells |
| borrowing capacity will allow they to proceed. | | | | an agent a great deal about you. They then wonder |
| I prefer a JV where both parties are equally motivated, | | | | why the Agent never calls then ... Dong!!! |
| have different skill bases, but each regards the other | | | | Keep your 'ego' under control. Their sales success |
| as contributing equally. | | | | rests on their ability at 'reading people.' Remember |
| You know the feelings that can occur, "I'm working | | | | what I say in my ebook! |
| harder that you ...all you do is the phone and number | | | | When you are in the development business, you are in |
| crunching work ... I'm always outand about on site | | | | the business of: |
| dealing with the real work." | | | | Getting People To Do ... What You Want Them To Do |
| Don't forget why you got together in the first place. | | | | Within The 'TIME' AND 'Costs'You Set. |
| So there are many reasons for JV's. However, you | | | | That means that you have to be in control of 'How |
| must be clear as to why you are doing it, and it must | | | | You Treat People.' |
| be secured by a legally prepared JV Agreement. | | | | Agents know a lot of people ... maybe, they even |
| A lot of 'practical people' hate legal documents ... a JV | | | | know those people who want to JV with you. |
| Agreement is a legal document and both parties must | | | | While you are doing this "work" don't forget to do what |
| understand what it says. If one of you is a bit slack on | | | | my ebook tell youto do about research. |
| this point, it is up to the other to sit them down and go | | | | Last idea for finding JV people - talk to your friends - |
| through it ... it's important! | | | | put an advert in the local newspaper seeking |
| Why? | | | | expressions of interest from people interested in doing |
| Suppose the JV deal hits a rough patch and your | | | | what you want. |
| partner says, "I didn't know that ... why didn't you tell me | | | | OK, you've found a partner who has the land and you |
| ... I left all that legal garbage to you ... blah, blah." Got It, | | | | are comfortable with the relationship after several |
| have the arguments at the beginning of the deal ... not | | | | meetings. |
| later. | | | | Important question! What value does your prospective |
| A JV Agreement sets out what each party will | | | | partner put on his land that will be put into the JV? |
| contribute, both money and effort, and sets out each | | | | Just throwing a few figures around to give you an |
| parties obligations. It also sets out what happens if the | | | | example. |
| parties 'fall-out' with each other as well as the division | | | | Let's say that market value for his land right now is |
| of profits or losses. | | | | $300,000. But he wants to put into the JV at $400,000. |
| There is a lot more at stake if you JV with your | | | | So if your JV Agreement involves you gaining a share |
| rother-in-Law, other relatives etc ... the term | | | | of the profit, your share will be $100,000 less. Got It? |
| 'on-going-nightmare' is a phrase that readily comes to | | | | Now let's say that part of your skills contribution to the |
| mind. | | | | JV includes arezoning of the land to a higher level and |
| And if one of those family JV's brake down, it dosen't | | | | you achieve that for the JV. |
| matter how many pages are in the JV Agreement, or | | | | That rezoning may take the land from a single unit |
| what the words say to prove that you are "RIGHT," ... | | | | (house) dwelling zone to a six dwelling unit zone. |
| as far as YOUR Brother-in-Law is concerned, you are | | | | Your efforts have increased the land value significantly |
| a 'expletive deleted.' | | | | ... no, not six times, as house properties are valued |
| Just thought I'd get that out of the way!! OK? | | | | differently to multiple unit properties. But it may have |
| One more thing ... doing a JV with a rich person, when | | | | increased by 3 or more times, depending on your |
| you are many levels poorer then them, is also not | | | | market. |
| smart. | | | | Once again the $100,000 will come off your share. |
| Why? | | | | Now that may be OK by you, because you are just |
| Well, in simple terms, when 'push comes to shove' | | | | starting out on your first development ... it is always |
| money rules ... | | | | better to KNOW what you are agreeing too. |
| The golden rule says, He who has the GOLD, RULES. | | | | I hope this information helps you in your consideration |
| Also, if the rich guy tell you not to bother with a JV | | | | of entering a JV.but please remember, don't just read |
| Agreement ... he appears to be saving you money ... | | | | my eBook ... study it ... take notes in a special hard |
| tempting eh? ... what he's really doing is taking away | | | | cover Development Copy Book that you will buy. |
| your legal rights. | | | | Writing things down is an aid to learning and |
| Yep, you'll have less rights than an employee. If that's | | | | remembering. |
| the deal ... better to be an employee! | | | | My LAST DON'T ... Don't start any of this JV stuff until |
| In my my ebook I emphasise the importance of getting | | | | you know my eBookinside out. You must not just be |
| the Structure Work of the business organised - you | | | | able to 'talk the talk' - you must know what you are |
| will build a much better development business from a | | | | talking about. |
| secure foundation. | | | | What I am all about, is helping you to do residential |
| When you are doing your interviewing of the | | | | development with the RISK reduced. |
| associated professionals, try to see if they, personally, | | | | If it takes four years study to get a basic Degree and |
| have any entrepreneutial tendancies. | | | | say another five years to get some experience, why |
| They may have land, houses, houses for renovation | | | | would you think that you can enter the development |
| etc but don't have the 'TIME' or 'SKILLS' to do the | | | | business with little study -- no experience and expect |
| work themselves. | | | | to be profitable? |