How to Choose the Right Joint Venture Partner (9 Tips)

My last blog post talked about Joint Venture (JV) partners and how to find them.  Then I got to thinking about how important it is to make sure you get the right JV partner. You don't want just anyone!

If you are thinking about joining forces with someone to invest in property that's awesome because a joint venture can open up opportunities that might be out of reach if you're going solo. More money, different skills, new ideas, and varied strategies make JV partnerships appealing. But, there are important things to think about before diving in.

You don't want a partnership that starts off great but turns bad later. To make a JV partnership work, you need a good partner and the willingness to work closely together, trusting each other's abilities.

So, if you're wondering whether a JV partnership is right for you and how to choose a partner, here are 9 tips to help you decide.

1. Don't Rush In

JV partnerships can be great, but don’t jump in without preparation. Get to know your potential partner first. It might seem exciting to start a property deal with someone new, but there are real risks!

2. Know What You Want

Think about the kind of partner you want. Write down the positive traits, skills, and experience an ideal partner should have, and also note the flaws and weaknesses you want to avoid. This will help you figure out what you’re looking for, much like creating a job description.  

3. Start Small

Once you decide to work with someone, start with a small investment deal or property project. If they push for more before you’re ready, they might not be the right partner. Test the waters with one project to see how things go and avoid potential problems later.

4. Look for Complementary Skills

Find someone with different skills but the same vision. A successful project needs varied experiences and skills. Ask your potential partner about their future plans, values, and what they can bring to the table.

5. Observe During a Project

How your partner behaves during a real project tells you more than just talking to them. A small, low-risk deal lets you see their strengths and weaknesses in action.

6. Define Roles Early

Decide who will do what as early as possible. Write down each person’s duties. Some roles will be obvious based on your different skills, but you’ll need to discuss and agree on other tasks. Create a future plan with all roles mapped out and your partner’s name next to each one.

7. Be a Good Partner

Once roles are set and you’re confident in the partnership, focus on being the best partner you can be. Work hard and be reliable. This will encourage your partner to do the same.

8. Keep Communication Open

Always communicate openly, honestly, and respectfully. When challenges arise, don’t blame each other. Instead, focus on finding solutions together.

9. Avoid Conflicts of Interest

Don’t rush into new ventures that might distract from or conflict with your partnership. From the first deal, discuss and agree on how to handle outside opportunities.

Conclusion

You don't have to partner with the first person you meet or the first person that says "yes".  You are amazing and property investing is for the long-term - make sure your relationships are too!