Rent to Own Properties, Joint Venture Agreements & Other Investment Opportunities
When people find out that we work with a group of real estate investors, their ears tend to perk up a bit. Right away they start to think about pitching us the next great ‘thing’ that they have.
Sometimes they are real estate related investments, and sometimes they are products that have nothing to do with anything….seriously. Which is why the pitches we are given often don’t lead to anything. People don’t give any thought as to how to make it mutually beneficial. It is a no give, all take relationship.
Sorry, not interested.
But last month, a long time Rock Star VIP member presented a joint venture deal to us on a Kitchener property that we decided to jump on.
Here was the biggest reason why this stood out to us.
It worked for everyone.
Our JV partner was looking at cashing out some of the equity he had in the home but because of a restrictive mortgage, financing on the property wasn’t a very viable option.
The property was in a good area, in good condition, he already had a tenant lined up and was in the process of signing leases.
So for this deal to work for him he wanted to cash out some money from this property. (Over time homes really do act as your own private ATM machine.)
For us it worked because we were able to get part ownership of a property without having to qualify for financing. This allowed us to use less capital than if we did the deal on our own.
But we are always looking to have our money work for us and although this investment doesn't seem like it will be a home run, we expect it to provide a solid return.
deal gave us both what we were looking for. It was win-win.
As a side note, another type of venture that we have found success with is in rent to own properties.
Whether you are approaching someone for a real estate joint venture or some sort of similar partnership in a business venture, here is the very first thing you should be asking yourself:
HOW CAN I HELP THE PERSON I WANT TO DO BUSINESS WITH?
This allows you to break down even the largest barriers.
Many people will automatically think that it has to be some sort of financial arrangement, but it doesn’t.
It may require a bit of thought but you need to figure out how you are solving a problem for someone else.
What is the gap that you are filling for them?
For example, maybe you have a large customer base that you can promote your partner to, or perhaps you have an area of expertise that you can use to help them.
We can tell you that everyone we know with a bit of success has been made countless offers before.
Usually by people that have only reached out because they can see the benefit.
If we had to guess, we would say only about 5% of the people that have approached us for some sort of joint venture have even considered our side of things.
Instead they want us to commit time, money, and resources to some sort of half baked idea. There is no regard for any other projects that we have underway, or comprehension of the commitment it would take to make it a success.
We’ve learned that very rarely will any worthwhile opportunity come from someone that hasn’t proven themselves already, either as a business owner or as an investor.
These are people that have been through the trenches and know what it takes, either through other joint ventures, rent to own properties, or other types of investing experiences. Their experiences allow them to appreciate the value that someone else brings to the table and structure a joint venture so that the commitment is worthwhile for everyone.
You might be coming to the table with the best idea/product/service ever seen, but to do so without dedicating some time to your partner is a mistake.
Take a serious look at who they are, what they do, what kind of investments they have done in the past (rent to own properties, straight rental, etc.) and how you can make their lives better. In today’s world you can Google or Facebook somebody and learn a lot in a short period of time.
It proves to them you have put some serious thought into what you are doing. It sets you apart from the crowd. And, it allows them to understand what is in it for them.