A joint venture renovation project can be both a profitable and a rewarding experience. There are risks to be considered, but with the right partner and a good definition of each person’s role in the project, the risks are reduced.
Finding The Perfect Joint Venture Partner
A joint venture renovation is well worth the risk if you find the right partner. The important part is taking the time to set up your partnership properly. You can think of it as a marriage. Choose a partner:
- Who understands your goals
- That you respect
- That respects you
You may choose to work with more than one other person. A word of caution here: Limit the number of people you will be working with. Everyone involved in the project needs to establish a working relationship with each other. The decisions you make along the way need to be aligned. Too many people could compromise your renovation project.
How To Choose A Joint Venture Renovation Partner
A person’s financial capacity is an important aspect of a good joint venture partner, but there are other factors to take into account too. You should also consider:
- Your prospective partner’s character, skills and emotional intelligence.
- Their personal goals, hopes and dreams.
- Double checking that your prospective partner can do what they say they can. Do your due diligence.
- Their renovation project history establishes their level of competence and willingness to engage with various aspects of the project.
- Discussing how they manage risks. What will they do if things go wrong?
- How they will complement your skills and capacity to deliver a successful renovation.
Three Things To Put In Place To Make Sure Your Joint Venture Renovation Partnership Is A Success
#1 Define your roles
Before you begin working on your joint venture renovation it is essential to figure out how you are going to work together. A renovation project is a lot of work. Splitting the work and responsibilities amongst the partners can make it a lot easier. Take the time to decide who will be responsible for:
- Project management
- Site Management
- Risk Management
- Contract Administration
- Due Diligence
Knowing who will be taking care of each aspect of your renovation will help ensure that nothing falls through the cracks and gets overlooked. It can also prevent any resentment between the joint venture partners.
#2 Set up a robust legal structure
You are entering a business agreement, so it is important to make sure that everyone is covered on a legal basis. Sit down together before consulting with a lawyer and decide on the terms of your joint venture agreement. It will save you and your partner a lot of time and money. I suggest including the following in your legal agreement:
- Project types to be completed
- Process of sourcing properties
- Profit and loss distribution
- Money management
- Decision-making process
- Conflict resolution
- What happens if a partner can’t continue?
Once the agreement has been drawn up by a lawyer you can go ahead and set up a bank account for the joint venture renovation project.
#3 Discuss the details of your Modus Operandi
Everyone has a different way of working. There are many ways to renovate a property. You and your partner need to have a unified approach to avoid any confusion.
It is best to do your research together. Some people prefer DIY, others would rather use our proven $100K Renovation System. Whatever you decide, make sure it is the process with the least amount of risk.
The Right Joint Venture Renovation Partner Equals A Successful Project
When you find the right partner to complement your renovating skills and make sure to set up a good foundation for your project, the benefits of a joint venture outweigh the risks. Do your homework and iron out the details before you begin to make sure that your project runs smoothly – or at least, as smoothly as a renovation project can!
At The School of Renovating our mission is to give you the tools and the inspiration to experience all the joy, creativity and profit that renovating has to offer. Have a look at our free resources to get you started on your own or with a partner.