First of all what is a Joint Venture? A joint Venture is when two parties (or more) each with certain attributes, join to create a relationship with the goal of making money. Similair to what people do when forming a business, and it is kind of like a business. Sometimes people will bring the money, others the experience and the plan, or a combination of each.
A good joint venture will create something of value for each party, it is important however to ensure you are happy with what you are getting and not focus on what the other person is getting. When a person does not understand the value of something it is usually because their focus is on what the other person is getting from the deal instead of what they are getting. If you want to create wealth from a joint venture then both should be getting a well above average return from what they put in. Another perspective is to understand that usually the venture would not happen without the other, if its the money person then they would not have been presented with the opportunity if the non-money contributor had not found, developed, and even been taught about how to do a joint venture, and conversely, the deal would not proceed without the money partner agreeing to put in the capital. It is then in fact a true 'win-win' when created properly.
Creating a joint venture is also more than just finding someone with money and or experience it is about learning what life goals each one has and then seeing if the venture you are about to undertake is suitable for that. It is important to be honest and have a conversation about what you are looking to achieve in the next 3/5/10 years so you can see if this Joint venture and the people involved are a match for those goals and targets.
When I have worked with joint venture partners in the past, I have always asked them what they want to achieve with their money, what are their financial goals and then I also ask them what they expect from the venture. I have had a lot of different responses but some are the same regardless of who I have asked. Usually the top three are:
1. They don't want to lose their money
2. They want to get a good return on their money
3. They want to know they can trust you with their financial future
In order to be successful in raising money you have to be able to actually do this and not just say you will, what would you be willing to do to ensure the venture succeeds? Would you roll up your sleeves and paint till midnight, lay floors, work 7 days a week if required to make sure those criteria above are met? If your not willing to do those things minimum, then I would advise against Joint Venturing. Now again would you be willing to do all of that above and more while the other partner does nothing and they still get equal returns? If you are then perhaps you could look to joint venture and start to build relationships of wealth I call them. Not just for you but more importantly for your partners. we have several partners who are good friends and they have entrusted us with their whole financial future, millions of other peoples money invested in joint ventures in real estate because they believe in what we do. They didn't at first and slowly they saw what we do, how we do it, and then we had a proven track record . At first be willing to give more to them as you gain experience, this is a reward for them taking a chance on you. Once you have experience and its all good, and you have been through ups and downs so you can show you have resilience to tough times, then you can start asking for more, your true worth. My one piece of advice here is, always, always, ALWAYS get an agreement signed, and checked by someone suitable other than those involved such as a notary or a lawyer to make sure it is clear.
If you start a joint venture my advice would be to ALWAYS put their needs and goals first, make sure you can answer all of their concerns and 'what-if's', have plans for in-case, and be willing to walk away to ensure they get what they wanted even if its at the expense of what you wanted. Creating wealth for them in the venture first before your own selfish needs will make you think different, act different and build lifelong relationships that will truly be beneficial to both. That is how you create wealth in a joint venture. If you want to know more about how to create joint ventures for raising money to invest in real estate with message us we will be glad to help you, or if would like to discuss the possibility of joint venturing with us on some of our next projects, send us an email to firstname.lastname@example.org and we will be glad to have a conversation with us.