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One of the things you want to do when you start investing in real estate is you want to start looking for investors. And these investors you want to look at are going to become, what's called a joint venture partner.👩💼↔️👨💼
A joint venture partner is someone that is part of the transaction. They aren't just writing you a check necessarily. Well, they might be, but they're not a mortgage lender. They are not somebody who is just loaning you money, money that is expecting a certain return on a regular basis. 👨💼💰👩💼
A joint venture partner is somebody who is usually writing you a check and usually paying for a lot of the purchase not expecting a monthly return.
For example, let's say you are purchasing a property worth $400,000, and you need money to buy that property. And it's worth $200,000, or it costs $200,000 and you need another $100,000 for renovation costs.🏘️💰
What you do is you go out and you look for a joint venture partner or multiple joint venture partners.
I've had a couple of people involved in a single deal and that's okay too. You pull all your resources together and you go out and you buy the property. When you do that, you put together what is called a joint venture agreement.👨💼🤝
In the joint venture agreement, you lay out what each person's responsibility is as part of that agreement.
In the case of a money partner, which is a type of joint venture partner, they would be responsible for providing all the cash required in the transaction.
And the way you would write that up in the joint venture agreement, you would say they would be responsible for purchasing the property. That may be that they come up with all the cash, or maybe they go get a mortgage. It's really up to them.✔️💰🏘️
However, they know that they can purchase that property as well as providing any construction costs or any costs that are going to be required to carry the property for X period of time. They are in the deal just like you are in the deal.
Your role in that joint venture partnership and that would be documented in the joint venture agreement, might be that you are responsible for purchasing the property, for acquiring the property, for looking for properties, for the ongoing management of the property, for the general contractor of the fix and flip let's say if that's also what you're doing. 👩💼↔️👨💼🤝🏘️
You might also be responsible for collecting the rent if it's a rental property for paying out all the different people that are required and making sure that the mortgage payments are being serviced, that the taxes are being paid, that insurance is being paid that there if there is any monthly profit that it's distributed properly, and any ongoing maintenance is being handled for this property.📥💰🏘️
Everybody’s tasks as part of this joint venture have to be documented properly.
The joint venture agreement must be signed by each party. As I mentioned, you can have a number of different people involved in the joint venture. You can have many partners … you can have a deal maker for example whatever you want to call the relationship or activity that you are performing as part of this joint venture. 👩💼↔️👨💼🤝