JV confusion

[ryanlake]

I am currently trying to market to my friend back in Esterhazy SK, (which is in boom time right now with the new potash expansion) he owns a couple properties with crazy cash flow (5 bd house renting full capacity @ $800/room!). I asked if he wanted to diversify his portfolio into a different market (Edmonton where I now reside) and do a JV together.

Now it is just a matter on selling the economics to him and let him know he is making a worthwhile decision if he so decides to.



So now I am finding myself giving him research i've done on my own and stuff I get from other sources, but when getting down to it we need to find a property. This is my first JV, so I am not sure if I should be actively looking for a property all the time, crunch the numbers, then give him the details...OR just analyze one property I was considering in the neighborhood of interest, crunching the numbers and giving him just an example of what to expect.



My gut tells me just to give him an example because he is not a solid JV partner yet.



I am wondering what other investors do to attract a JV partner and how they go about promoting deals.

 

[Thomas Beyer]

[quote user=ryanlake]My gut tells me just to give him an example because he is not a solid JV partner yet.



I am wondering what other investors do to attract a JV partner and how they go about promoting deals.
You have to show a track record first, based on 2-3 assets that you purchased with your own $s.



Then use a very similar house (or condo or TH) to show how a JV would look like. This proposal needs to contain pictures, numbers, assumptions, a story about yourself and research about the area.



Once you have a firm JV partner who states that he (or she) is interested in investing X $s then you actually look for that property.



This may require 10 serious prospects. You will find that there is a wide gap/continuum between folks saying "I may be interested" to "I am interested" to "I will write a cheque" to "I am actually writing a cheque" to "I am writing a cheque and will co-qualify for a mortgage".



It will take a while to convince people to write a cheque and you may lose a deal or 3 in the mean time, so patience and tenaciousness is required !



You need to continuously market your JV and your ability to execute a JV. Always always have high level numbers ready while meeting people in a variety of social settings (church, golf club, soccer club, dinner party, at work, with family ...)



There is a REIN event June 16 in Toronto focused on JVs and money raising. I will be one of the panel members/speakers and I invite you to attend that day long event to improve your ability to raise funds !

 

[richardkp]

I am by no means an expert in JVs and raising capital but I would second what Thomas is saying about the Toronto event.

A whole day dedicated and focused on raising capital!!! I'm in and can't wait to be there and learn from those who are presenting.

 

[johnsu]

I agree with Thomas, establish your "creditability" first, then find deals. Without creditability, you would be considered as a "salesmen" selling a dream rather than an "investors" offering an investment. Takes time and work to put together but it seperates the "speculators" from the "investors"

 

[RussellWestcott]

[quote user=ThomasBeyer]



There is a REIN event June 16 in Toronto focused on JVs and money raising. I will be one of the panel members/speakers and I invite you to attend that day long event to improve your ability to raise funds !



Just to give you some of the details of the event that Thomas mentioned >> click here


Just finished up the agenda and speaker line-up... and this will be an impressive event







Going to cover the following:







- how to present


- how to 'break the ice' your elevator pitch


- how to structure win/win deals


- how to market to attract investors


- how to report to CRA


- how to work with banks


- how to protect yourself from securities commissions


- how to get started (panel of experts)


- how to move beyond single investors and raise money from groups of people (panel of experts)


- how to exit







And best of all a networking social at the end of the day







See you there

 

[ryanlake]

Is that same presentation coming this way to Alberta anytime soon?

 

[RussellWestcott]

Maybe --> click here