Small refurbishment projects can prove to be the perfect Joint Venture deal. If you’re skilled at renovations or sourcing properties, but just starting out in property investment, then you probably won’t have a lot of spare cash to spend on buying properties to do up. A wealthy time-poor friend or property investor may though.
This way, you can both benefit and split the profits. Of course, any project involves risk too, but you would both be splitting it (so it wouldn’t be as painful as if you’d embarked on the project alone).
The way it commonly works though, is that once the property has been refurbished and can be sold or rented out, the investor is then repaid the cash, and both the investor and yourself split the equity. You might also be looking at rental income if you decide on a longer-term agreement, and to get a tenant in, instead of selling.
Finding that partner
It’s not always easy finding someone to complete a Joint Venture with. As well as having a skill set to complement your own i.e. one individual is in construction, the other an architect and you yourself can source and finance the property, you also need people you know you can trust and get on with.
Individuals you’ve worked with before or who come highly recommended by friends or colleagues in the business are worth speaking to and building up a relationship with over time. That way, you’ll be able to tell whether you could go into a JV with them. Certainly, never go into a deal with someone you’ve just met once or twice.
Another good way to find a potential JV partner is to network and get to know developers, estate agents, builders and investors locally. Keep your ear to the ground to find out who is considering developing and who is looking for a project to invest in. Let people know you’re looking too.
Individual or company Joint Venture?
The smaller the project, the easier is it to go with just one or two individuals rather than team up with a company offering JV deals. That’s because the more people involved, the more complicated the JV agreement becomes and the more cash gets spent on solicitors before you’ve even started.
Let us find your next renovation property
At Sourced, we have a team of experts across the country who specialise in finding the type of properties which are ripe for renovation. Regardless of whether you are looking to do the renovation work yourself, or simply looking to invest in property refurbs locally, then our team of property sourcers will get networking as well as physically seek out properties themselves.
We have individuals who have completed a number of refurb projects themselves and others who have spent most of their property career working in Joint Ventures. They can advise as well as point you in the right direction of funding, available skills and even potential partners. Simply ring us on: 0333 123 1330 for more information and a chat.