Our family has used JV partnerships to enhance our property business. Primarily we have JVd with local builders who had years of experience but lacked financial resources. These local builders know the areas like the back of their hand. They find the deals….We makes sure the deal stacks….Propose terms which we think are fair to all & test one small deal….
We sold a family business in 1994 and had liquidity from the business. Our solicitor got us involved in property both as bridging as well as JVing with builders who had integrity. We use the same model. The key point of a successful JV Partnership is finding people with integrity.
We have JVd now on over 45 Professional HMOs and Social HMOs over the last several years. Both sides know and do everything to their best abilities. Builders get paid immediately after accountant registers the CIS. This keeps the builders loyal and gives us quiet on our HMO projects. They have solved issues for us and we all work as a team. It is best to work as a team when doing HMO projects because invariably issues come up.
We keep the JV partners motivated by splitting 50/50 however we charge the deal 5.5%. This keeps the deal moving as it costs the builder in lost profits for any delays. We have been working in Manchester over the last several years and now have spread out to areas such as Liverpool and even Doncaster.
Integrity and doing what you promise are the keys to a successful JV.