Property partnerships are a way for developers and buyers to come together to purchase properties at a higher amount than usual. The ability to partner and leverage your money with someone else gives you the ability to aim for higher profits and also share the risk and burden of a development. It should always be a consideration to have a prior relationship with the partner and a level of trust between you before embarking on any developments.
It is a common use process to enter into a partnership with one or two or more people to enable you to stretch to a development initially beyond your means. As with any partnership or joint-venture it should always be a first consideration to employ a good solicitor and accountant to help draft the partnership contract so that each entity knows their position and for any safeguards that need to be addressed. The partnership and joint-venture route is a well trodden path with many developers utilising this, in some cases the partner can be silent or in other cases they can be an active participant in the development.
The other beneficial point is that some partners will have different skill sets and bring different things to the table, for example a silent partner may bring the funding element or vice versa. These scenarios can be very beneficial to a developer to have a silent partner who will be providing the funding which can also be leveraged with bank funding or from a another private funder and the industry for property can provide such opportunities regularly.
The first thing you should consider at the outset is to find a suitable development that can be achieved with the desired outcome being first and foremost in your mind. Even though you have a partner and potentially more funding than normal you should be very cautious as to not overstretch your overleveraged yourself. The market can easily turn at any point and you may be left high and dry with a development that is beyond your means and caution should always be the main factor and focus.
The Matthew Cullum property blog covers the areas of joint ventures and partnerships extensively and we have many articles resources on this part of the market. If you would like to register and receive more information on how to structure a joint-venture or to partner with other like-minded buyers and developers please feel free to register your details and we will be in touch with more information. Lastly joint ventures and partnerships are a great way to extend your abilities and to reach for higher goals in terms of your development size and we always recommend to get the best advice at the outset before embarking on these opportunities.
MATTHEW CULLUM Social media