JV partnering for new Investors

So for a Joint Venture there’s different possibilities. You could be acting as the lender or the partner bringing the deal and managing the rehab. Or you could both be putting in money and both bringing something to the table from finding the deal to managing the rehab etc. This post is going to cover the pros and cons of a Joint Venture and some tips for those that get involved in a Joint Venture.

For those looking for a JV lender - It’s important to remember you’ve got to bring something to the table. For example finding a great deal. That’s the most important thing. Also being able to rehab the property and save money on that end. Usually it’s one of these 2 things or both for a investor to look at you and say okay I’ll lend you money so we can JV on a deal.

So why would you do this instead of just get a hard money loan and pay interest for a couple of months and make the profit? Well for those that use JV lenders there’s generally no monthly payment or built up interest payments. So this can enable you to do more than one property at once. Just don’t get in over your head and spread yourself thin on doing a professional and quality job. Another reason someone might be looking for a JV is that their cash reserves are spread thin and they don’t have the funds to put down with a hard money lender.

For lenders a JV can be enticing as earning half of a nice profit can be much more rewarding than a few months interest payments. It’s important to work with someone who’s experienced and can show you a track record of successful investments and provide you with referrals of people they’ve worked with. There’s many JV investors who earn ridiculous returns on their investments by partnering with an experienced team who can find deals and get rehabs done quickly. Of course for those that don’t partner with an experienced team the process can become a nightmare - so make sure you do your homework on who you’re lending money to and partnering with.