How to structure JV deals (Profit and Loss)

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How to structure JV deals (Profit and Loss)

Shiv Dutta
Investor · Mississauga · Member since 2017 · 33 posts · 5 votes

Hello Everyone, 

I am new in the world of JVs. currently I own few properties but with my own money. which runs out quickly. 

I am wondering do you use any tool (like DealCheck) to find out how much a prospective JV will make from the deal (cashflow, or after sale profit). so that I can approach people with those details. I created my own Excel (for giving a rough number for JV). and how do you share the income and expense and profits.

I understand, with experienced investors with more properties, its different ball game. I have a deal in Saint John (an accepted offer), I can go over the numbers to get a real example. or if someone has existing numbers to share with me.

Any guidance will be appreciated.

thanks

Shiv

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Huong Luu
Specialist · Vancouver, BC · Member since 2016 · 315 posts · 145 votes
5y

Here are my suggestions, make your presentation simple and easy to understand, and then invite them to a 2nd presentation or call to get more info. Make sure your investors are accredited unless you are setting up the JV in a different way. Present high level # with the cashflow, mortgage paydown and anticipated appreciation. Show the total ROI the investor can make and tell them what kind of splits, what makes this investment different from others, etc. I have a few presentations I can share with you. With whatever spreadsheet you use, make sure you can explain and navigate it. If you use someone else's spreadsheet and have trouble explain the numbers, it puts your expertise into question. Good luck.

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  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    @Shiv Dutta I use Landlord's Cash Flow Analyzer, which has good JV tools for facilitating this presentation.

    0Reply
  • Shiv Dutta
    OP
    Investor · Mississauga · Member since 2017 · 33 posts · 5 votes
    5y

    Thanks Chris, but sorry for my ignorance, the tool that you mentioned "Landlord's Cash Flow Analyzer". Is it some software or online tool.

    Is it this one (Canadian version): https://www.rentalsoftware.com...

    0Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    Yes... that's the one.  Canadian version for Canada. Its a series of macros in Excel, but it calculates every metric you could ever hope for and does projections over whatever duration you choose

    1Reply
  • Derek Kohut
    Member since 2020 · 10 posts · 2 votes
    5y

    @Chris Baxter why don’t you use the BP rental property tools?

    0Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    @Derek Kohut

    1) they lack detail (they are good for a quick analysis, but not what I need for real number crunching)

    2) they are not customized for Canada and do not consider Canadian financing or taxation (both of which are included in my preferred solution)... here is a screen cap

    1Reply
  • Shiv Dutta
    OP
    Investor · Mississauga · Member since 2017 · 33 posts · 5 votes
    5y

    thanks Chris again for sharing the screenshots. 

    this tool, is it an complex excel or a stand-alone software that I need to install on my windows or Mac. on the web page it looks like a software program, but your screenshot looks more like excel. !!

    0Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y
    It's an Excel workbook with VBA and macros. You can trace all calculations relatively easily
    0Reply
  • Derek Kohut
    Member since 2020 · 10 posts · 2 votes
    5y

    @Chris Baxter thank you I will have a look.

    How are you finding properties these days? I am having troubles finding any decent deals in my local market.

    0Reply
  • Huong Luu
    Specialist · Vancouver, BC · Member since 2016 · 315 posts · 145 votes
    5y

    Here are my suggestions, make your presentation simple and easy to understand, and then invite them to a 2nd presentation or call to get more info. Make sure your investors are accredited unless you are setting up the JV in a different way. Present high level # with the cashflow, mortgage paydown and anticipated appreciation. Show the total ROI the investor can make and tell them what kind of splits, what makes this investment different from others, etc. I have a few presentations I can share with you. With whatever spreadsheet you use, make sure you can explain and navigate it. If you use someone else's spreadsheet and have trouble explain the numbers, it puts your expertise into question. Good luck.

    1Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y
    Originally posted by @Derek Kohut:

    @Chris Baxter thank you I will have a look.

    How are you finding properties these days? I am having troubles finding any decent deals in my local market.

    I look beyond my local market.  I am currently exploring options in the USA.

    0Reply
  • Shiv Dutta
    OP
    Investor · Mississauga · Member since 2017 · 33 posts · 5 votes
    5y
    Originally posted by @Huong Luu:

    Here are my suggestions, make your presentation simple and easy to understand, and then invite them to a 2nd presentation or call to get more info. Make sure your investors are accredited unless you are setting up the JV in a different way. Present high level # with the cashflow, mortgage paydown and anticipated appreciation. Show the total ROI the investor can make and tell them what kind of splits, what makes this investment different from others, etc. I have a few presentations I can share with you. With whatever spreadsheet you use, make sure you can explain and navigate it. If you use someone else's spreadsheet and have trouble explain the numbers, it puts your expertise into question. Good luck.

    Thank you. let me connect with you

    0Reply
  • Shiv Dutta
    OP
    Investor · Mississauga · Member since 2017 · 33 posts · 5 votes
    5y

    Hello @Account Closed, I am opening up an old thread here. Whats your take on DealCheck vs Landlord's Cash Flow Analyzer (that you mentioned above). which one you felt gives you more control on

    1) different numbers, better way to showcase 

    2) a good PDF report to share.

    Regards

    Shiv

    1Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    Hi @Shiv Dutta I use LFCA... I don't use anything else so can't make a comparison for you. It costs $100... trivial if you are running a REI business

    0Reply
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