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Anyone done a JV with friends?

Discussion in 'Development' started by albanga, 11th Dec, 2015.

  1. albanga

    albanga Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,105
    Location:
    Melbourne
    Hey All,
    As my subdivision/renovation project winds down I want to start exploring my next project which will likely be a 2 townhouse development.

    I could probably stretch myself to take this all on myself but am thinking about involving either 1 friend or potentially a few to spread the risk and stress.

    Has anyone done this? I know involving friends/family with money is not always a great idea but I am a big believer that if you have a common goal and most importantly EXIT strategy it can work really really well.

    If someone has done it I would also be keen to understand how you presented this to them including figures. I am confident I can produce the numbers as I have done this myself (to an extent) but if someone has a breakdown they would be willing to share it would be much appreciated.

    Thanks in advance
     
  2. Leo2413

    Leo2413 Well-Known Member Premium Member

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    18th Jun, 2015
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    Sydney
    sanj likes this.
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,363
    Location:
    Sydney
    Depends on how its being financed too. That's where care is needed.

    Unit trusts, disc trust that own units, companies and other ways can all be considered and vary with prop location. Important that each seeks legal advice. Independent legal advice. Beware even a basic unit trust may require a unitholder agreement to govern exit, valuation and dispute resolution.

    A JV may give you opportunity to use scale. Little profit in 2TH but 4 might be very different with similar risks.. Chat with BeDeveloper about his views on this. He has a calculator that assists. Most clients who have gone this way would all look to go 3-4 and avoid 2.
     
    SOULFLY3 likes this.