Why Joint Ventures Are A Preferred Method

So one of my business models is to utilize joint ventures (JV) on fix-and flip properties. This week has reminded me of why I continue to use this model over a Hard Money Lender or other options available. Let me first explain the normal setup and Pros vs Cons of it. I am a experienced investor and was a contractor before getting into investing. I am still a licensed contractor that I utilize for my investing now. So first thing I want to address is that with a joint venture I have my eyes on the deal, and another vested party does as well, I find value in not getting overexcited about a project with this model as the Sum is always more than the individual parts, there is great power in a TEAM. While it is true a HML will look at your deal, I find their interest is significantly different from a JV, in that if a deal goes south they are positioned to make out the best, that is there business. With a JV if a deal goes south we are equally in pain, but not one person getting the better of a situation. So I structure my deals as that I find a deal, run the numbers for ARV and fixing the property. The purchase is funded 100% and the Rehab Materials and Labor is paid by the JV partner, I in turn GC and handle all local aspects. I have been asked why should the partner give up 50% of the profits when he can hire a GC. I find this to be intriguingly why this model works, first a typical wholesaler or contractor rarely have a vested interest in your numbers, secondly the GC part of this deal is being brought as part of the deal, increasing the profit share. I simply ask the question back, if I can find and fix a deal, why don't I use a HML. I was reminded this week as 14-16 inches of local snowfall over the last week has made work stop for several days and crawl tremendously slower for a few more, I watched as a colleague had contractors carry materials from a block away as the alley was in passable and the driveway had turned to such ice that contractors van was sliding back into the street. Also I got a phone call from a new flipper who had lost her key in the snow and after an hour of being unable to find it, had to drill out the locks on the house so her contractors could get in and start work. Realizing the advantage I have of having a JV partner I can talk to and say its going to be on hold for a week has tremendous value. Its also not like I wasnt able to do anything this week, I was still able to negotiate other deals, without having a HML says lets get this deal done first then we will talk. While if I had a HML that's precious time ticking towards a deadline and another payment that has to be made. I find a proper JV brings tremendous value to both parties in that less stress in required on the local person trying to worry over timelines that can not always be controlled, and in exchange a higher profit will be realized by the partner. I also finder longer term, and stronger bonds can be made, making it easier to adjust for things as they happen, and I still make plenty of money with a few less gray hairs at the end of the day. Everyone has a system that works for them, I just wanted to highlight some issues from both sides if the fence so to speak. So yes I give up 50% of my profit to sleep better, and I think my funding partner is okay with a chat, every now and then, knowing he getting more money than a HML every would see on a deal, unless they take it back.