Private Money Partnering Table of Contents
Find Out All You Need To Know About Private Money
Partnering And Joint Venture Real Estate Investing.
Finding Private Money Partners
How To Find Private Money Partners for Real Estate Venture Capital Using The Web And Other Resources
Testimonials About Private Money Partnering
Find Out What Investors Have To Say About The Information On The Private Money Partner Site.
Private Money Real Estate Venture Capital Glossary
Coming Soon. Terminology for Private Money Partnering And Real Estate Joint Ventures.
Private Money Joint Venture Real Estate Blog
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Private Money Partnering Home Page
Introduction To How We Can Help You Find The Private Money That You Need.
Joint Venture Variables To Negotiate
Perspectives On Building An Agreement
Venture Variables - What You Negotiate
Joint Venture Variable Checklist:
Perspectives On Building An Agreement
When two partners are building an agreement, the variable components to be negotiated are the
factors which most critically affect whether the agreement is "fair", or perceived to be "fair."
Hopefully you're negotiating these items and coming to some agreement before you buy the
property, because you become more vulnerable whenever you have to do something in a hurry.
If the two partners are relatively knowledgeable real estate people, you'll probably have different
attributes or complementary skills so that you can join forces and thus reach the same goals. If
Debbie or Dan Has-A-Deal is working with a Money Momma / Money Man outside the real estate
community, that partnership venture arrangement will probably be quite different. In all
likelihood that money partner doesn't want to know too many of the details, and may not want to
be bothered with them at all. The Money Man may want just the results and positive reports
along the way.
In any case the negotiated agreement has to provide that each partner receives the particular
benefits that make sense for them individually. Sometimes it may help to use the "T bar" form
to help list and sort out the benefits. Peter Fortunato recommends using this process whenever
possible, since it graphically clarifies which partner is getting what. You and your partner can
decide who wants what, and what you personally can give up easily in order to make the
arrangement work for all parties. Agreements can be adapted as needed. Agreements are also
broken, since any contract can be the subject of litigation. The processes outlined in these
materials are designed so that you can avoid the agony and expense of dueling attorneys.
The important concept is fairness. The reason to be fair is that if you're not, it will come back to
haunt you. Have any of you ever been in a situation where things
were structured so that it was all going one way, not yours, and you
really felt it was unfair? It may not have happened yet, but it's going
to happen sometime or another. For instance, if the money person is
too demanding and effectively squeezes all the incentive out of the
operating partner, why wouldn't the operating partner feel justified in walking and leaving the money partner in the lurch with all the work incomplete or poorly handled? The operating
partner needs the incentive to do the job. And the money partner needs to be treated fairly as
Let me give you a real life example that happened to me. A number of years ago some neighbors
and I, a husband and wife team, went into a joint venture arrangement. Initially we bought the
property to hold as a rental, because at that point in time there was almost certain appreciation
in our marketplace. Well, we held it for three or four years but then the real estate market just
went down hill. At that point we decided to lease-purchase the
property because we needed to sell it. We found an interested
lease-purchase buyer fairly quickly. But next the initial
lease-purchaser lost his job, so he couldn't qualify for a regular loan. What do you do in a case like that? You adapt your goals
with the property and keep them on because they are good
tenants and they love the place. Or, you buy some vacancy and try to sell again. My partners
wanted to sell, so we bought vacancy, put it on the market and got another set of
Joint Venture Variables to Negotiate - Chapter P (continued)