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When you are looking for a joint venture property investor for your next project, finding one is easy. You turn to the internet, do a Google search for joint venture partners in your area, and within seconds, multiple listings appear for JV partners interested in property investments. Easy enough, isn’t it?

But how do you find the right JV partner for you?

The one that understands what you are about, that has the same ideas and goals as you and that offers the same level of communication as you? That is the tough question. You want a JV partner that provides the right fit and that you can work with daily to ensure your project is successful and profitable.

At the simplest level, there are essentially two types of JV partner in a property project: investors and developers looking for finance partners and finance partners looking for investors and developers. Even if you are Lord Sugar or the Candy Brothers, sooner or later you will need to look at additional sources of finance for your projects and so that’s what we will focus on the most in this post today, although as you will see, many of the principles would apply to either type of JV partnership.

Let’s take a look at some ways that you can find the right JV partner for you before you begin your next residential or commercial property investment project:

1. Consider a variety of investors.
You don’t want to choose the first one that shows up on the Google search or the first one that responds to your ad. Look into online and offline networking events, business angel and funding circles as they hold a wide range of investors looking for projects just like yours.

2. Decide what you want from this partnership.
Are you looking for just a financial investment or do you want someone with experience, skills or contacts that can be valuable to your project’s success?

3. Make sure that they align with your values and ethos.
This is vitally important as there are many investors willing to provide funds for your project, yet they don’t all align with your core values. Are you willing to sacrifice your values and ideas for some investment funds? If not, you will need to keep searching for a JV partner that shares the same values as yours. This could prove more difficult than you think and it could also delay your project while you spend time finding the right partner. Our core values are: practical, ethical and sustainable property projects that provide win-win outcomes for all involved. We always place our JV partner at front and centre of all we do in a project too.

4. Make sure that you have a clearly documented JV agreement, which sets out the roles and responsibilities of the partners.
This is for the benefit of both sides and if done correctly can avoid confusion later. As a minimum, it should set out who does & decides what, the ownership and any revenue division including any security agreed, what sort of costs are permitted under the JV, how the project exit will happen (including contingency plans), when the agreement or project will end, how the project will be reported and communicated in and how any disagreement will be resolved. All of these provisions and more are within our JV agreement, for the benefit and protection of either side. We always provide the same level of assurance in our JV structures as we wold seek in reverse, that’s a key part of our values.

Just as it is important to find the right JV partner, it is also important to keep your project funding on schedule. Be sure to have some wiggle room in your search criteria as this will help keep you on schedule and enable you to finance your project successfully.

If you would like to understand more about how we go about our own JV projects and see some case studies, then just get in touch with Richard from Real World Property Training as he looks after our JV partners.

We are hearing this quite often lately, “Buy to let is dead, put your money in commercial property investments instead.” Is this really true? Is buy to let dead and are landlords better off purchasing commercial properties and letting them to shop owners? Some industry experts believe so and that is causing a lot residential property owners to make the switch.

At Real World Property Training, we feel that this statement is premature and not completely correct. For the landlords who are looking into commercial property investments, there are some important differences that you must take note of.

First, if you purchase a commercial property and let it to a small, independent shop, you can expect much quicker turnover and that could lead to an empty space and no revenues. Financing can also be another challenge with many High Street banks inflexible when it comes to commercial lending.  They are also less likely to offer interest-only mortgages and will often only lend for the period of an existing lease, which can be too short to repay the whole loan. Another drawback to the buy to let commercial sector, is that your property will see more wear and tear as customers come and go. This may seem insignificant, but take into account several thousand customers visiting your tenant’s business every month and you can see the need for concern.

This isn’t to say that purchasing commercial property for buy to let is a bad thing. With new regulations coming that make it more difficult for residential buy to let investors, there is good reason to move to the commercial sector. But that doesn’t mean that you have to only invest in commercial properties. You could choose a mixed-use property that provides the investor with the best of both worlds. For example, a shop space with a flat above it. This could provide a steady tenant income from the flat and an income from the shop below that may or may not be as dependable. Another plus of a mixed-use property is that it overcomes the 3% stamp duty premium for purely residential property.

Finally, for new residential property investments acquired through a limited company, some of the mortgage interest tax benefits being withdrawn from individuals can still be claimed. This essentially means that similar tax breaks as before the recent changes to the rules can still be enjoyed. Admittedly, there are some costs associated with running a company and finance is going to be different too. But for some, this could still be a good option to take.

So, three alternative routes for buy-to-let then…commercial property, mixed-use property and residential property using an alternative legal structure. Even in certain situations buy-to-let as an individual will still also work, such as for smaller portfolio landlords and basic rate taxpayers. The best option is the one that suits you and your personal goals and resources, which is why we always start there…what do you want to achieve, what resources, skills and preferences do you have and then decide on the right path to follow, designed for you!

When deciding which type of buy to let investment is right for you, be sure to do your research and contact a professional with any questions that you might have.

For more information on deciding which type of property investment is right for you, contact Richard or Damien from Real World Property Investment today.

Broadly speaking, any area can be a good area for flipping property, after all – if we buy low and sell high, how hard could it possibly be?

Well, unfortunately it is not quite as easy as that simple statement suggest!

Keep in mind that with a flip strategy there are 3 ways to make money:

  • through the purchase price,
  • controlling the works / conversion budget, and then
  • maximising the sale value.

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