Daniil Kliman strategy - Joint Venture

9 Replies

I rec'd an email regarding a webinar from Daniil Kliman (spelling ?) and I watched it.  I didn't buy the Guru package or anything, but he did go over an interesting strategy which we don't hear about much and that is using Private Money to do Joint Venture/Equity Partners deals.  The Private Lender/investor puts up the money for the house and rehab and you rent it out.  Both investors get 50% of the monthly rent and split the equity 50/50 at the end of the deal when the property is sold. Is this a feasable strategy to use?  The numbers looked good in the presentation, don't they always, but they did make sense too.  Let me know of any feedback.  I am trying to find the negatives of using this strategy, if there are any.  Thanks!

@Jason Harmony  I never heard of this guy, and while you don't provide enough details for the numbers you give to make sense, this is kind of the strategy @Joe Villeneuve  uses.  I've tagged him here so maybe he'll pipe in.

I assume you mean that they split the profits 50/50, so that is the profit from rent after expenses and the profit from the sale.

@Larry T.  @Jason Harmony  "...using Private Money to do Joint Venture/Equity Partners deals. The Private Lender/investor puts up the money for the house and rehab and you rent it out. Both investors get 50% of the monthly rent and split the equity 50/50 at the end of the deal when the property is sold. Is this a feasable strategy to use?"

This is on of the entrance/exit strategies we successfully use all the time.  It requires the following "players" in order to work:

*    Cash Partner to buy/rehab the property. This can be substituted with any source of cash including a loan that is not tied to the property (non lian-able debt).

*    Active Partners

*    Credit Partner to refinance.

Example:
* A property cost $43k, including rehab the turned a 2 bed into a 3 bed, that after rehab increased the ARV to $60k.
*   Refi of 75% is acquired = $45,000
*   Refi pays back loan (+ minimal interest)
*   Cash flow including Rent, all expenses, Iinc. PM) = $450/month after refi
*   Partners split cash flow based on agreed %'s.

There are many variations of this, based on who the partners are, what their responsibilities are, and the particular property, but this works like a charm.  This strategy allows investors that have either cash, credit or knowledge to pair up with others that don't have all/one of those items to make deals happen that never would have been able to happen if the investor went it alone.

Joe Villeneuve
REcapSystems
A2REIC

This is by no means anything new. The hard part is finding the money partner. It is also hard to find a deal with enough meat that the money partner gets a good return while leaving enough for you to take your cut. 

@Ned Carey  Correct.  This is where the importance of the market come in.  The investment market(s) you are in may not be the same for all deals. For instance I will invest in City #1 for all of my Flip deals, and city #2 for my holds.

If your local market won't work for you, go with another.  We have a lot of out-of-state investors flipping near them, then buying Hold Houses here in Michigan.

Joe Villeneuve
REcapSystems
A2REIC

Thanks for all the good information.  I appreciate your feedback.

@Joe Villeneuve   Yes Joe I am a believer in take what the market gives you.

I'm very interested in a joint venture. Need credit partner I can do all the work.

Originally posted by @Rickey Luna :

I'm very interested in a joint venture. Need credit partner I can do all the work.

 You find a good deal Rickey Luna - the credit partners will come.

I think you are definitely right Jonathan 

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