2 WAYS TO INVEST
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1. JOINT VENTURE PARTNERSHIP​
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Overview: A Joint Venture (JV) partnership involves two or more parties coming together, contributing their expertise, capital, or resources to execute a real estate deal. Each partner plays a role in the process, which could include financing, property management, or securing deals.
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Key Players/Contributors: In a JV, you have:
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The Deal Finder: Someone who locates profitable real estate deals, negotiates terms, and makes acquisitions.
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The Project Manager: Responsible for managing the entire project, including accounting, renovations, property management, cash flow management, and creative financing.
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The Mortgage Qualifier: A partner who can qualify for a mortgage loan to help finance the project.
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The Capital Contributor: Someone who provides the downpayment for the deal.
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Risk and Reward: In a JV, partners are generally involved in both the rewards and risks of the deal. Each partner shares in the profits based on their contribution but also takes on a portion of the risk. Additionally, they are often "on title," meaning they have legal ownership of the property.
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2. LOAN PARTNER (Secure Promissory Note)
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Overview: In this type of partnership, one partner (the lender) provides the financing for the deal, typically in the form of a secured loan, and the loan is guaranteed by a promissory note. This type of partnership tends to have a more stable structure for the lender.
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The Promissory Note: A legally binding document where the borrowing party agrees to repay the loan with interest on a set date. In a real estate context, this loan is often secured against the property, which adds a layer of protection for the lender.
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Risk and Reward: The loan partner earns a fixed return based on the agreed-upon interest rate, and the loan is personally guaranteed by the borrowing partner (e.g., someone with experience in managing real estate projects like Brad Samuels). This provides a level of security because the lender is entitled to get their money back, regardless of the deal's outcome, as long as the property is sold or refinanced. However, this doesn’t come with the same profit potential as a JV, which typically involves equity in the property and a share of the profits.