In this addition we will be discussing the benefits of joint ventures in property development. In many cases property buyers find it difficult to find the money to put towards a deposit on a property particularly when they have a large portfolio and their resources are used for other properties. Although you can get up to 90% funding from banks for the purchase price and up to 80% for build costs in most cases when you have no funds for the deposit it becomes increasingly important to have partners which have readily available funds.
Particularly with these state of the market in mind there are plenty of high net worth clients have funds available for joint ventures and finding them is the key to increasing your portfolio and pipeline of developments. In many cases websites such as Facebook and LinkedIn are helpful in finding the right people that are willing to invest money in certain property projects, be it residential or commercial or buy to let property.
The joint-venture industry is a very active one there are many development companies that utilise joint-venture is to increase their property holdings and development pipeline. In most cases joint ventures are structured between parties that know each other passive investors then it can be helpful to bring on clients to your projects that can help you fund the purchase.
The second element was building a successful joint-venture is structuring the deal so that the investor receives a healthy return for hazard passively investing and as a developer you make enough money to cover costs and make it worth developing. You also need to consider costs of development and funding, this namely is interest costs which will increase as you go through the building process towards the sales and of the development. These costs can rapidly increase so we suggest not to give away too much to the joint-venture partners initially and structure in a way that is profitable for all parties concerned.
The Matthew Cullum blog will always provide the best resources to help property buyers/joint ventures and we have many JV partners on our books that are looking for development opportunities. It would be wise to leave the details and enter our mailing list for more information and help and resources in building joint-venture partnerships.
There are downsides to joint-venture is however and usually they come in the legal process, In many cases JV partners will have unrealistic expectations of what can be achieved through the partnership. This is why a good solicitor is always recommended to structure the joint-venture is partnerships and make sure everyone is happy with the terms before they enter the partnership. These costs can add up and solicitors have a way of making more work than is needed in many cases and thus it is important to keep a tab on the costs and potentially share them around to other partners as this can help to share the burden. However joint-venture partnerships have many positives and if you register with the Matthew Cullum blog we will give you all the help that we can.