Post by
Jun 7th, 2023

Are you considering a joint venture with a developer? 

Joint ventures can be a real game-changer, offering great returns and exciting opportunities. But, hey, let’s not ignore the risks that can turn this experience into a painful one. 

Joint ventures work like this: the developer brings the sweat equity, and you bring the funds. The profit split? Well, it’s either 50-50 or 60-40, depending on what you and the developer decide.

Now, let’s dig DEEPER. 

As a JV partner, YOU become AN INVESTOR who gets a fixed return on your money and manages the project from a project management perspective. On the other hand, THE DEVELOPER TAKES CHARGE of running the project and acquiring the site. The JV partnership can take different forms, such as a loan agreement or sitting in the trust, depending on the project’s circumstances.

It’s essential to do your due diligence on the developer. Trust us. You don’t want to be in a project where everything goes south. 

Having some knowledge and asking questions is crucial, even if you’re not a developer by trade. Don’t hesitate to pick up that phone and do first-level due diligence. And remember, the building part is the easy bit; finding the right site, dealing with councils, and making sure everything aligns—that’s where the real risk lies.

JV agreements should be expansive, extensive, and well-thought-through. Don’t rely on handshakes and good faith; ensure everything is properly documented and legally binding. We’ve heard horror stories of shady deals and even Ponzi schemes. So, covering all worst-case scenarios and protecting your interests is crucial.

Remember to evaluate the developer’s commitment. How much “skin in the game” do they have? Do they have a vested interest in the project’s success? These are crucial factors to consider. And remember the relationship with the builder. The right builder can make or break a project, so choose wisely.

So, grab your headphones, hit that play button, and join our hosts, Moxin Reza and Cheryl Leong, in this newest podcast episode for some eye-opening discussions and exciting stories. We promise you won’t regret it!

Subscribe: Apple | Spotify | YouTube | Omny | RSS


Episode Highlights:

  • 00:00 Welcome to Helpmebuy Property Podcast
  • 01:35 How Does the JV Partnership Work? 
  • 03:56 Is It More of a Loan or Development Agreement With the Developer? 
  • 09:30 Perks of Teaming Up With an Experienced Developer and the Downsides Too 
  • 12:05 Spotting Red Flags When Investing in Real Estate 
  • 16:53 What if a Project Doesn’t Get the Green Light? What Happens? 
  • 19:17 It’s Not All About the Percentage of Returns When Deciding to Invest in a Project 
  • 21:04 The Nitty-gritty of Legal Agreements and Important Considerations When Crafting a JV Agreement 
  • 26:21 Why Must You Be Aware That Loan Sharks Have Zero Intention of Finishing the Project? 
  • 29:30 Let’s Explore Other Crucial Factors to Consider When Evaluating the Developer



    If you find this episode insightful, please don’t forget to subscribe,

    tune in, and share it with others to get ahead in property investing!