The 7-Step JV Process

June 29 Blog image
“It’s better to own 10% of 100 properties than 100% of 1 property.”


No matter how wealthy and successful you are, whether you own 2 properties or 200, every real estate investor will at some point run out of money (or credit) to make their next down payment.


It’s at this point you will need to consider a Joint Venture (JV).


JVs are also great for investors just starting out, who may have more time available than capital to invest.


If you remember the Determine Your Investor Profile exercise I shared in a previous blog, you will know that Joint Ventures can be useful to investors at any level.


In this video let’s go through the 7-Step JV Process to help you find JV partners.



Your 7-Step JV Process


1. Why believe in you?
  • What is your why?
  • What are your goals?
  • What positive impact do you make on the community?


2. Find the Partner
  • How are you going to generate leads?
  • How are you going to qualify leads?
  • What system are you going to use to collet relevant information?
  • How are you doing to look for multiple-deal partners?


3.  Preparing the Offer

  • What are you going to include in your presentation package?
  • What is your value add?
  • What are your proven results?
  • What are the property financials?
  • What’s the plan?
  • Detail the exit strategy options.


4. The Meeting

  • What are you bringing to the meeting?
  • Where are you going to meet?
  • What questions do you anticipate? How are you going to answer them?


5. The Transaction

  • Who’s involved?
  • What are you including in your welcome package?
  • How are you going to monitor progress?
  • What’s your follow-up assurance plan?


6. The Value Add

  • How are you going to communicate?
  • How often are you going to send out Progress Reports? What are you going to include?


7. The Payout and Repeat

  • When are you paying out the investor?
  • Would you work with this partner again? What’s next?


Check out a transcription of this video below:

All right, here’s our seven step process. If you wanna initiate or build or create a JV partnership relationship, whether it’s today, six months from now or at some point in the future, this is, these are the seven steps that you’re going to go through to to find, to create, to nurture that relationship and to continue to generate profits in real estate ongoing.

Okay? Step one is why believe in you? You’ve got to help them understand. You have to understand why people should believe in you. And if you don’t know why people should believe in you, then there’s no point in doing the other six steps. Let’s figure that out first. Why believe in you? And then we have to find the partner.

So this is about lead generation and marketing, qualifying prospects. So we’ve got to actually find the partner, somebody to be able to talk to. And then we’ve got to prepare an offer. So we have to have an offer prepared. Now, this can be a property that’s available right now, but what we often recommend is that it’s not a property,

you don’t present a property available. You present an example of something that you would do with a member. With the partner. The reason is that if you present a property that’s available or prepare a property that’s available, you probably only have it under contract for 10 days or 15 days, maybe 30 days.

And now you’ve got a tight window to be able to set the meeting and do all of your other steps. So what we like to do is show a deal that you’ve done in the past, or an example of a deal that you would do, how it would work out, and you bring that to the meeting. At the meeting, you’re gonna sit down with your potential partner that you found in step two over here, under find a partner.

In the meeting, you’re going to show them the deal and you’re going to ask about what they’re looking to get out of this relationship, and you’re going to show them how you can provide that for them. All right? Then we go to the transaction. So how do we actually transact? How does the money move? How does the contract get created and the timelines around that.

And then there has to be some sort of value add. And this is particular for the active partner, has to add some sort of value. They have to bring something to the table. So what is the value add, that act that has to happen, the value add and then the payout and repeat. This is the fun part where you get paid.

Your partner gets paid and then you just repeat it. So let’s take a look at these in a little more detail with some bullet points of what you can actually do to make this happen. So when you’re deciding on why believe in you, think of your why. Why are you doing this business? Think of your goals and think of your positive impact on the community.

If you sit down with a partner and you’re looking to raise money and you could show them your why this is so important to you, they’ll see the drive, they’ll see the twinkle in your eye, and that will help motivate them to become a partner. The numbers still have to look good, right? Not a lot.

They’re not necessarily going to invest in you because you have a great story. But your story is what’s going to have them believe in you with their heart. And in preparing the offer and the meeting, you’re gonna have them believe in you with your head. Okay? Believe in you with your heart. What are your goals?

What’s your positive impact in the community? Because there may be a good chance that this potential partner lives in the same community you do. And so wouldn’t it be a benefit if you are positively impacting the community they live in? So not only do they get paid a great ROI from working with you, but their whole community improves and they can be a part of that.

So this is really important. The why believe in you. What are you going to do for them from more of working with your heart perspective? Okay? So you have to figure this out. Have this on a piece of paper. Understand what it is before you go and find partners. Before you spend time and money finding partners, you have to be solid with the why believe in you.

Okay, now we find the partner. So we want to generate leads. We’re going use similar marketing methods that we would use to find tenants or find buyers. We’re going use that to find partners. So we’re going to post be posting ads. We’re gonna be going to networking groups. We can go on the Keyspire dashboard and look for partners there.

Then we want to qualify the leads. We want to make sure that the leads actually have what we’re looking for, if that’s money. We want to make sure that the leads actually have money to invest, so we want to find a way to qualify them. Then we want to collect relevant information. This is usually on a phone call or on form that would be on your website.

If you’re running this as a business and you’re getting, you’re scaling it up a little bit, and I want you to look for multiple deal partners. What this means is you wanna look for partners that are interested in doing more than one deal. Somebody that might say, I’ve got. A few hundred thousand dollars to invest.

I want to invest in real estate, but I have no time. And you ask them if we can get you a 10 or 12% ROI would you be interested in doing a few different properties with that ROI? And good chance. They’ll say yes. They’ll probably say I want one proven first. And then I’ll do more deals with you.

And that’s. Perfectly normal. In fact, that’s probably better that they don’t say, okay, here’s all my money. They say let’s do one first. Prove it to me and then we’ll go from there. That’s what you’re looking for because the finding the partner and the marketing piece takes a lot of work. And if you can find somebody that you can, a customer that you can work with over and over again, a partner you can work with over and over again, then you don’t have to do that

finding a partner piece again. All right. Now we want to prepare the offer. We’re going to create a package. We’re going to make sure we include our value add, we’re going to include our why. If we have proven results, and we’ve done this before, we’re going to show the properties we’ve worked on. We’re going to show the property financials of the properties that we’ve worked on, or the example property we want to show them.

We’re going to show them the plan. What is our plan for this property or a property. If you have a rera rehab strategy and you want to purchase property, add value through rehabs, and then you want to sell it and split the proceeds, show them that plan, and of course, show them the exit strategy. This is the, how do I get paid.

You want to make sure they know how they get paid. They’re the money partner. They, you have to, they have to know how they’re going to get paid. And this can all happen. This all happens at home, at your kitchen table preparing all of this. And then in the meeting, you’re going to go to the meeting, right? You wanna think about what are you going to bring?

And this comes through experience. The first 10 meetings are going to be difficult and they might not go well, but meeting 11 is going to be a little better and meeting 12 and you’re going to get really good at this. What do you bring to the meeting? Where’s the best place to meet for you?

Anticipate some questions they might have and make sure you have the answers for them. I like the two ears and one mouth. This means you listen at least twice as much as you talk. Your job here is listening. You’re intaking information, you’re hearing their story, and you’re looking for the problem they’re having.

Once you identify the problem that they’re having your job, your role, what you are getting paid for is to be able to solve that problem. If you can solve problems, you will always make money in business, any business, doesn’t matter what it is. Business is about solving people’s problems. So if you can think how you’re going to solve the other person’s problem then you will you’ll be much closer to having this partner work with you.

Be a solutions provider, right? Think of yourself as a solutions provider. You can even tell them that’s how we look at our business. We’re a solutions provider. So I want to know what problem you’re having right now or I want to know some of the challenges you’re having. Tell me about some of the challenges you’re having and I’m going see if we can solve those for you.

And then the transaction. So once they say yes and they agree, then I want you to walk them through the transaction. If you don’t know the transaction, you might not know the transaction. Now, this is where you’re gonna work with your lawyer, who’s going to and the Keyspire lawyers who we’d recommend, who’s going, who’s done this many times who’s gonna walk you through the transaction on the phone, tell you how it works.

You’re going to record everything that they say, and then you’re going to walk your potential partner through the transaction. When they say yes, give them a welcome package, even if it’s just a card and a bottle of wine. Give them a nice welcome package that says, thank you for believing in me. You will not be disappointed.

I’m going make this happen for you, and I’m excited to do this over and over again with you. Give them a welcome package. Monitor the progress, and this is on the transaction because we know that transactions can be frustrating, right? Even when we’re just buying a property, financing is frustrating and going through the contract part is, gets frustrating

sometimes. It’s not easy but you want to make it as easy as possible for your partner. So monitor the progress. Give them daily updates with the emails. If they don’t like daily up daily updates, ask them, how often do you want to be updated? Do you want to be updated every day? Or just when major events happen, or do you wanna be want to once a week?

Find out what they’re looking for and update them and monitor progress based on how they want to monitor progress. I’ve had partners that have wanted an email every single day. I’ve had partners that have wanted an email once a month, and some partners are like, you know what? Just send me the check when it’s ready.

Okay. I don’t even, I don’t even need an update. I believe in you. We’ve done this twice before. I just want to see the check four months from now when we’re done. So find out what they’re looking for. Two ears and one mouth. Be a solutions provider and provide that solution for them. And then the follow up assurance.

It’s really important if somebody gives you their money and it goes, sits in a legal trust account that they feel confident that, that money is going to be used for what you told them is gonna be used for. Going to so make sure that you follow up. The value add. So say this is a renovation and you’re going to do the renovation.

Make sure you communicate how they want to be communicated throughout, and make sure that you that you give progress reports based on how often they want progress reports. All right? And then the payout and repeat payout the investor and do it again. And this is from the perspective of the a of the active partner or the working partner.

That you’re going to pay out the investor, you’re going to do it again if you have a, if you need to find a brand new investor, you’re going to go back to finding the partner, generating leads and honing your marketing skills. And if you have multiple deal partners that we were looking for, then you’ll probably go back to the meeting.

You’ll go back to the meeting and you’ll say, look, here, I got another great deal. Here it is. Do you want to do it again? And then we go to the transaction, the add value, and we just cycle through. And this is where you can do virtually unlimited deals as an active partner in in, in real estate investing.

Because if you can get good at this seven step process and raising money. And you have investors that want to reinvest with you every single time. Because remember when you pay them out, they’re going to have money, they’re going to have a chunk of cash, and they have to invest that somewhere. So if you’re exploding their capital or even just getting them an eight or 10% return, then why wouldn’t they want to reinvest with you?

If you make your investors successful, and this is something you can tell them, if I make you successful that’s a major benefit to me because you’re going to want to reinvest with me, and my business will keep growing by making you successful. In fact, it’s by making you successful that I succeed.

So I have a massive incentive to make you successful. That’s that’s something that you can tell them when you are preparing the offer or during the meeting.

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Michael Sarracini

Michael Sarracini is an expert on creating lifestyle freedom through entrepreneurship and real estate investing. He’s an award-winning entrepreneur, speaker, author and TV celebrity. Michael is the co-founder and CEO of Keyspire

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