Hard to partnership or do JV with stranger

I have been experimenting getting a JV or partnership together with people with the same interest and ideas. What i have found is actually quite difficult.

To name a few things that makes it difficult were:

1. Trust. Even if you know the person quite well or even close friends is still quite hard to start

2. Points of interest. Everyone has different ideas as to how to approach the JV and getting the same ideology is very difficult.

3. Experience. One of the partner or JV must specialize in one area and not common to both. Find a good mixed of ppl with different experiences in the related is essential.


Could ppl here that had JV or partnerships previously that was successful please let me know what make it a success?

 

@TML

@Westminster and I are running a JV at the moment.

They are not easy but when they work they work well. If they dont work they fail spectaularly.
I think initially its important to have a short term project to work on. Differences of goals make long term business arrangements difficult. Have a clear exit strategy and exit point.

The business plan is more important than ever. You need to document exactally what the plan is. Be transparent with each other, and communicate constantly. Even though we live on the otherside of the world, it is rare that a week goes past that we are not in touch.

Best of luck.

Blacky

 

thanks Blacky.

Iam trying to JV with my friends. Even though we have the trust part they dont have the motivation or the time to put in to make it work.

Yes for sure a business plan is a must to establish what you plan to do.

 

Then it wont work. No way - no how. Find someone who does. If they have the motivation they will find the time.

Ive done other JV's which ended badly with very good friends. If I had my time again, I would have my friends back - over any potential profit.

Blacky

 

How do you do JV's with people you don't really know?
(Assuming motivation and financial circumstances meets the requirement).

 

You meet them on an internet forum...

 

I'm stubborn and opinionated, I wouldn't want to do a JV with anyone and there no way any one would want to do one with me either!

I would really consider whether there's a way of doing the project by yourself. There's just so much potential with things going wrong if you do a JV with a stranger, in my opinion.

 

We are involved in 2 property JVs and one business JV.

The first property JV is with friends - a trust/company setup, invested in fairly standard RIPs - and that is one I would NOT repeat. It's going as well as can be expected, but still..... not again.

The second property JV - and of course the business JV - are more along the lines of what @Blacky mentioned above - a business relationship. It is working well, and I don't regret it for a second, but in future my strong preference is to NOT do JVs, if at all avoidable. Even when things go exactly as planned, it still limits you in some ways.

I guess the only difference is if it is a larger development project, or a larger CIP investment, etc. Those can be worthwhile, but still need a huge amount of due diligence and planning (exit strategy. "rules", etc etc) before committing.

What seems like a good idea today can end up a really, really bad idea tomorrow. And with multiple parties involved, a clear exit plan is absolutely essential.

 

You very much need aligned goals and defined roles. The planning just becomes so much more important (failing to plan is planning to fail!) and the documentation and legal agreements need to be better, you really want the contingencies in place for when things don't go to plan as much as the original plan, specifically the exit options/strategy if it doesn't work.

Also really helps if you find guys with different areas of expertise, everyone has their own way of doing things and when you can clearly define who makes decisions on what area things will work far better. For example say you have an architect and an accountant in the JV, it makes sense to keep the accountant's input to creative more limited and vice versa on numbers, when you get two architects you get too much conflict in how to do things.

Can't stress that planning is everything though.

 

it sounds like many wouldnt go in JV if they had a choice or even though after a relatively good experience.

Totally agree that unless there is a distribution / allocation of work with a plan in place and working with a team with various expert skills that contributes to the project that it still have a high rate of failure.

So many instead of going into JV is better to get a mentor instead?

 

It really dependss what you are looking for. Why do you want a JV partner? And what do you want them to bring to the partnership?

A mentor is something different altogether. There are lots of threads on here and Somersoft about mentors. Are you coming along to the meeting on Wednesday? Gave a chat with everyone there. Good way to meet up with potential JV partners or mentors, or just someone to chat property with.