Joint Venture on a block of land

Hi everyone,

I own a block of land in Canberra in a sought after suburb and we decided not to build as we want to invest the rest of the money elsewhere and also from our calculation building cost will be tight and we don't want to get the risk of having the cost blown out of proportion and having to sell at a loss.

Rather than sell the land make no money due to stamp duty and sollicitor fees, someone on another forum recommended a joint venture with a builder as I own the block of land with no loan on it.

Can anyone give me some advice?

I have built 2 house in the past but never considered doing a joint venture.

How are the profits split? Total price of the property on sale or are the profit split after removing land cost?

Thank you for your help

 

*land and build cost

 

I do Jvs and you can pretty much split the profits anyway you agree to in the JV agreement. In its simpliest form, usually what each party brings to the table should be 50% of what's needed to make the deal work. And profits can be split 50/50. If one brings 70% of money/skills to the table then profits can be split accordingly . There are many ways to decide on the split . Most important is the Jv partners agree on the split and your jv contract is clear .

 

Thanks, I want to have a few clear idea before going to see a few builders and realestate agents as I don't want to be taken advantage of

 

JV with a builder will be tricky as building cost may include builder margin.
If you already have built 2 houses in past just find a partner with cash or equity to invest in your project.

 

And allow for GST and concerns with the margin scheme. Since one party adds the land the margin scheme isnt eleigible and GST issues with the land supply impact. In some cases its not material and others it is.

The agreements may be a partnership even if using other structures (eg trust) and that can expose the parties. Seek good legal advice