Joint ventures can be a great way to make money, but investing with other people carries some risks.
However, you can greatly reduce the risks by choosing your joint venture partner carefully.
Property Collectives founder Tim Riley says this involves a rigorous screening process, the same way as you choose your investment property.
"This is particularly true if you are assessing someone that you don’t know well. But it can also be hard to determine if someone you know is going to be easy to work with."
Riley says that, while there are many things you need to consider, a focus on the following should see you in good stead:
- A complementary temperament: Find someone who will fill in the gaps around your personality strengths. The trick is to first fully understand your own strengths. This is sometimes easier said than done.
- Different operational skills: Find someone whose skills complement yours rather than replicate yours.
- Similar work habits: Have a shared view as to how much you will work to achieve your goals.
- Self-sufficiency: Someone who functions on auto-pilot with virtually no input from you.
- A history of working together: Familiarity helps conversations move quickly and allows trustworthy cooperation. Emotional buoyancy: The capacity to support each other during the highs and lows of a property project.
- Total honesty: You and your partner(s) must be committed to telling each other the truth all the time, even if it’s tough to say or hear.
- Comfort in his/her own skin: Someone who knows themselves well and is comfortable in their own skin.
- A personality you like: If you don’t like your partner, all the other great qualities they possess won’t be enough to sustain you through the long haul.
- The same overall vision: It is essential that your partner’s main motivations for joining your venture include a passion for the project you are pursuing.
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