Anthony Dixon - A Guide to Joint Venture Investing

AGuide to Joint Venture Investing

Raising finance to buy property using other peoplesmoney

By AnthonyDixon

All RightsReserved 2019 Zepp Media

Table ofContents

Many new investors concentrate on how tosecure a good deal on a property without really knowing how to findfunding other than relying on banks. This is where many investorscan go wrong and potential deals fall through. Now more than everis a difficult time to secure loans and mortgages from bankinginstitutions. You are expected to jump through hoops before anoffer is made with strict lending criteria and checking throughyour credit history with a fine tooth comb.

Investorsunderestimate the importance of securing capital from private moneylenders. As an investor, securing this kind of finance can save youa lot of time and heartache. You can bypass the banks and tap intothe wealth of a sophisticated private lender. Even better, you canfind the kind of lender who already has the knowledge andexperience of investing in property.

When we aretalking about using a private money lender we mean forming a jointventure (JV). A JV can be an excellent way to build your portfolioquickly while other small investors are scratching their headswondering why no lending institution will provide them with amortgage. A JV can give you a firm footing in the propertyinvestment industry and reduce the risk of first timeinvestment.

Why would aprivate investor want to invest with you? Well, many privateinvestors are struggling to make good returns on their cash left inthe bank and they find it difficult to increase profits from theirown businesses. Other investments such as the stock market may bein periods of volatility, so investors are looking at property asan alternative. A professional investor is always on the lookoutfor better returns compared to what they are already achieving.

When you haveread the whole of this guide you will know how to find jointventure partners and put in place an investment team. This team canhelp you build your portfolio and wealth way beyond what you wouldbe capable of on your own. You will be confident in how to talk toother investors, how to present a deal, how to structure a deal,how to sell the idea to them and how to plan exit strategies sothat all parties win.

Do not wasteany more time and start your journey into investing, buying,borrowing and partnering. In a few years time you will be able tolook at this period as the time you built your empire and became aprofessional property investor.

So we have identified that ajoint venture is what you will be forming to invest with a privateinvestor. But what is a joint venture? Wikipedia provides a gooddefinition of what a joint venture is:

A jointventure ( JV ) is a business entity createdby two or more parties, generally characterizedby shared ownership , shared returnsand risks , and shared governance.Companies typically pursue joint ventures for one of four reasons:to access a new market, particularly emergingmarkets ; to gain scale efficiencies by combiningassets and operations; to share risk for major investments orprojects; or to access skills and capabilities.

A jointventure is all about what each party can bring to the investment.The best joint ventures are the ones where investors have skillsand experience that complement each other, or opposing skills. Youmay have one investor who has skill and experience in carrying outproperty refurbishments, whereas the other investor has access togood mortgages.

Of course, youwill be looking for an investor who has the cash and access tofinance. So what can you offer in return? Well, you can offer yourtime that a private investor may not have. There will be manywealthy investors who have other business commitments and dontwant to get their hands dirty. You can offer your time to put inthe blood, sweat and tears of searching for properties and dealsfor an investment. The private investor may also have theexperience but not the time, you have the time and can listen totheir advice as you search for suitable property.

As a smallinvestor, joint venture investing presents the most efficient wayof building a portfolio of property. You can build a portfolio in ashort space of time with less risk and lower capitalrequirement.

You will havemultiplied your buying power drastically and accelerated the timeit takes to build a sizeable portfolio. You will tap into knowledgethat you may never have got investing on your own and you may saveyourself on some costly mistakes in the process.

We have just mentioned thatprivate investors will have experience that they can bring to theventure. This is true with many investors with experience inbusiness that includes negotiating deals, contracts, projectmanagement, budget control, business law and all round businessacumen. Having a partner involved with this kind of experience canseriously increase your confidence!

Therelationship that you will build with your investment partners andthe experience that you can tap into may be more valuable thangetting the funds. An experienced investor will have the contactswith useful people that can make the investment a success. This mayhave taken years to build a similar network of qualified people ifyou invested on your own. A business partner might be thedifference between a profit and negotiating a bad deal. Althoughyou will be giving up a percentage of the profit it is better thanmaking no money at all or even a loss.

Joint venturepartners will enable you to keep building your portfolio even whenthere are tough economic times. No longer are you relying on thefinancial institutions that may block your application for finance.There may be more flexibility in any interest and repayments toanother investor in a joint venture agreement, something you wontget from a bank.

Forming jointventures can be a process repeated through many investments and canbe a reliable income vehicle. You dont need to make thingscomplicated and keep thinking of something innovative. You just usethe same system with your venture partners for similar types ofinvestment property, no need to think outside the box.

Using jointventure partners can give you both greater control and flexibility.You will be able to invest in opportunities whenever they arise andcan get out of any financial difficulty. Your wealth will not onlybuild financially but also in attracting people who can help you.Joint venture really does tap into your entrepreneurial mind set.With a team of investors to turn to, you wont have any moreobjections and excuses to hold you back from making the investment.There really will be no need to go to the bank.

As a small investor planning tobuy property, you wont have to worry about having no funds. Aslong as you can find the time to put into an investment then youare half way there to building your portfolio. You dont have towork full-time neither. Expect to make a lot more money by buildingsuccessful partnerships and giving banks a miss. Put the time intobroker property deals and you can make money from nothing. You willbe making a cut of the profits that each deal makes. Build multipleinvestments and you will be building a fortune.

You can buildmulti-million pound property investment business in a very shortperiod that would take you most of your lifetime on your own. Allyou have to do is get off your sofa and put the effort in. Jointventures will enable you to:

Build yourproperty portfolio quickly

Help you tobecome an expert in your local area, snapping up the best deals.You will find properties with high rents and healthy cashflows.