JV Partners - Locating & Successfully Partnering With

Everyone brings something to the table. Some bring the deal, some bring the money, others bring the ability to get things done (rehabbed, sold, etc.)

When there is a missing piece (if you don't have all of the pieces yourself), you could consider connecting with a partner (to joint venture on a deal) to complete the transaction.

Most people think that the term Joint Venture (JV) is used when a money source is needed to complete the deal.  And while that is very likely the case, it is not always the case. 

I have used JV partners in the past for other parts of the deal, including:

• A wholesaler as a partner for bringing the deal(s)
• A contractor for rehabbing the deal(s)
• A realtor for moving out the finished product 
• The property owner that wants to sell a property

Essentially their talents/skills were brought to the deal in lieu of sharing in the profits instead of charging (and being paid for in advance) for their services.

Locating a JV partner that could be a source for a property, such as a wholesaler or property owner, could come via attending local real estate investment club meetings, calling on the bandit signs (We buy properties), or calling on for sale by owner signs. Additionally, you could post online advertising via Craigslist.org, Facebook groups and more letting others know that you are seeking to partner with sellers of properties and share in the profits.  You might be surprised at the response that you receive.

Locating a JV partner to accomplish the rehab can be accomplished by meeting with/interviewing contractors that are familiar with doing work for real estate investors (most commonly flippers). These contractors understand that the investor's goal is to get the rehab completed as quickly as possible in order to sell the property. Typically it requires a contractor that is financially stable to handle the costs of labor/materials for the project until they can be compensated via percentage of the profits upon sale of the completed property flip. Honestly, locating this JV partner is more difficult than some other types, can can be done. When I have searched out these JV partners, I had to pitch it to a dozen contractors before finding one that could see the benefit vs. the risk. BUT, IT CAN BE ACCOMPLISHED. You could even group contractors together and have multiple JV partners on the same deal.

Locating a realtor as a JV partner, has in my experience worked best when using the realtor to locate the property to rehab/flip as well as using them to resell the completed property. This way they are exchanging the full extent of their services for a share in the profits from the project.

Locating a property seller as a JV partner, is something that may not be the first idea for a partner that pops into your head, but can be an excellent option as one. Every deal needs a property, and there are many sources for locating that property, but when it is a for sale by owner (whether it was sourced by your marketing efforts, or through the owner's offering of it) you have the option of taking on the current owner as a JV partner in lieu of buying the property at that time from them.  Think about it, not only do they have the opportunity to gain a buyer (you), sell at a price that they can live with, they also have the opportunity to share in profits from the flip plus learn along the way.  Talk about a win-win scenario!  The only down side is they will be waiting for the funds instead of cashing in with just the standard sell.

Honestly, not everyone's personality makes sense to utilize partnering on transactions, and not every project lends itself to the idea of a JV opportunity either. But when it feels right, with the right players and the right property, using a JV option to bring a deal together and conserve your cash in the deal can be a sweet thing!