10 Things I’ve Learnt (Part 9)
This week we’re going to think about working with JV partners and what constitutes a “good” partnership.
Over the past 20 years of investing in property for myself, I’ve come to realise that the quality of a JV is very much down to the individual partner rather than the terms of the partnership, the type of deal or even the amount of money that they bring.
To clarify what a JV or joint venture partner is, they are somebody who you bring in to your business perhaps on a deal-by-deal basis. They might finance the deals or you might finance the deals whilst your partner sources the deals. Or, the JV partner might be a business partner who works with you regularly and who has a stake in your business. There are many different ways that a joint venture partnership can be structured.
How the partnership is structured is not important. What is important is the quality of the partner themselves – and this is something that many, many investors fail to consider when they go into a partnership.
Often, they give too much importance to who they can bring in, or who can help them source a particular type of deal, or who has got the money to allow them to do the deals that they want to do. Whilst these are perfectly valid thoughts, in my experience whether the JV is going to succeed or not will often be down to the quality of the actual JV partner.
What do I mean by this?
Well, quite simply whether the JV partner is actually any “good” at being the JV partner.
To use myself as an example; over the last two decades I have naturally gravitated towards people I like. Over the years I’ve had several JV partners who I’ve had a personal connection with (or who I have been friends with), but whilst these individuals have made great friends, as joint venture partners they just did not work out. Perhaps we were too similar, but the truth of the matter is that if I’d known then what I know now, I would have looked for a completely different type of partner.
Of course, it’s certainly important for you to get on with your JV partner – but your decision should not JUST be based on whether you like them as a person. Because whilst having fun is great, if you’re not able to get things done then it will cause a lot of friction and strain for both your relationship and your business.
With this in mind, my advice to you this week is to think about the qualities that you need your JV partner to have – not just in terms of sourcing properties or bringing in the money, but also how complementary their actual skills are in conjunction with your own and whether they supplement or detract from what you are trying to do.
Here’s to successful property investing.
Peter Jones
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
thepropertyteacher.co.uk
By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to:
thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop
