How to Invest In Turnkey Joint Venture Real Estate
Joint Ventures and How to Invest in Joint Ventures
What is a joint venture? Joint ventures is when to parties come together for the benefit of both parties and what that means is real in real estate is usually it means buying a property to either hold long-term to do as a Rent to own or even to do as a fix and Flip. Usually its one-party doing a lot of the works. When I say a lot of work going out getting the property, fixing the property renting out the property, finding the tenants. So more hands on kinda thing and the other person being what’s called a passive investor or somebody who is providing a lot of the capital or the investment funds and maybe a all may be a combination or some type of split
and it could even mean a split up duties as well.
For example a typical joint venture that I do and if you’re working with me its usually around what we call rent to own or lease option investments. So what we do is we go out and we find a
tenant who needs to or wants to buy a home but can’t qualify for a mortgage. Typical rent to own situation they have a situation where they really would like to buy a home they cant get a mortgage but they have good income but the bank’s don’t like their credit situation because they’d just gone through a divorce they lost the job two years ago so the credit scores are low. But they really don’t wanna rent anymore so they come to us and they would like to do Rent To Own.
What we do is we shop around with this person that wants to buy a home but can’t qualify to buy a home. Then when that person find a property that they are interested in then we bring in an investor. Now you yourself, if you have the capital you can buy this property yourself. Again, I am looking at investing in a Joint Venture. So we bring in an investor and that investor will buy that property. Again, I am showing you my typical situation.
That investor buys the property and includes all the costs, down payment and any closing costs. For example: a $300,000 home, banks want 20% down which is $60,000 plus there is usually another 2% closing costs for land transfer, legal fees, taxes… So they are putting in 60-70,000 to purchase this home.
They way I structure my deals is we give them a good return on that investment over 3-5 years. Then what I do, I manage that property for them for the duration of that term. So from an investors perspective it really doesn’t look like anything different then a guaranteed investment certificate. All they had to do upfront is they had to purchase the property which meant they had to make an offer on the house with the Realtor, then submit an application for mortgage and then finally close the deal so they have to go to the lawyers and sign the papers and actually acquire the property.
The nice thing about our deals is that these properties are 100% owned by the investor. So my deal with me is, I find the tenant, I find the property, I arrange for the Realtor, I arrange for the financing,, I then manage the property and the investor is a total hands off turn key joint venture opportunity.
So its a really good way for someone who wants the benefits of Real Estate but without having to have the headaches of owning Real Estate. During the duration of that 3-5 years I manage it and then at the end when its time to sell the same thing. I get the tenant qualified, they purchase the property, we get the funds from the property and through that we pay out all the funds that was originally invested by the investor and then their is a profit in there that we split. I like to do a 50/50 split because I take a lot of risk cause I structure the deals such that I give them a bunch of insurances. They usually get with us 14-16% per year that is paid out at the end of the contract.
Again, this is for people that are looking for passive income, wanting to invest in real estate without the headaches of owning real estate and really don’t want the hassle of real estate. They are just willing to invest in a property and willing to work with someone like me on a joint venture opportunity.