Joint Venture Questions
I've tried to look through the posts for some tips on JV-ing but most seem to be about people seeking partnerships, not just seeking advice. (and when I go past page three of my search, it pulls up all forums not just JV... might just be my computer)
Anyway, all my past investments have been cash or owner-financed, and I am currently looking at a deal now which is making me consider JV. Whether or not I pursue it for this deal, I'd like to learn more about the process.
1. Do you just have a JV agreement or do you create an entity (llc,scorp,etc) together?
2. Would you do this with someone you don't know very well, and if yes, what do you look for in a JV partner?
3. Can you write into the agreement who decides when to sell (if its long term)? If not, who does decide?
4. Anything else there is to know?
Thank you!
Most Popular Reply
I would start LLCs/S-Corp if it is going to be a long-term relationship on a partnership basis. Equity sharing, etc.
If it's a one-by-one deal, I use a loan and an option and take title in one of my own entities.
If a person is going to have no involvement other than provide money a loan is a much better idea for them too. If one of your workers dies on the job site their money is protected.
Without providing more details it is hard to provide an exact answer, you should probably talk to a lawyer and accountant if we are talking a lot of $$.