By Russell Westcott
Most sophisticated and successful multi-millionaire real estate investors utilize Joint Ventures to create wealth at an accelerated pace. Some of the key foundational principles of creating successful Joint Venture relationships as discussed in detail in the ACRE (Authentic Canadian Real Estate) Program include:
You need to follow a proven step-by-step system that works and has been tested in all market conditions: up, down or flat. Make sure this system is complete, gives you all the details and works in Canada.
The backbone of successful Joint Ventures is the relationships that are established. Within your life and with the people you know right now, you have potential access to the money required to buy your next piece of real estate. A great quote around focusing on the importance of building successful relationships that comes courtesy of successful life coach Tony Robbins applies nicely here: “The quality of your life is the quality of your relationships.”
It is 100 percent your responsibility to follow through, take the action, get the results and move forward. The truly successful people are those who take full accountability for their results, both good and bad. One of the best illustrations of this comes in a quote from entrepreneur, author and motivational speaker Jim Rohn: “You can’t hire someone else to do your pushups for you.” You can hire a personal trainer to show you step-by-step how to do the push-ups, and they can even do a lot of pushups themselves, but until you get down on the mat and start doing them yourself, it won’t help you. As with everything in life, you still have to do the work to get the benefit.
4) Creating Win/Win Transactions:
If you can master the art of creating true win/win transactions, you are more than halfway to your goal of having an endless supply of Joint Venture money. Help others (your Joint Venture partners) make a lot of money and they will have others lined up to do business with you. If you make the relationship one-sided you will never get another penny out of them nor will they encourage others to work with you. Quite often you will be putting the needs of your Joint Venture partners ahead of yours. Remember: if you structure the deal properly, the more money your Joint Venture partner makes, the more money you make - a true win/win deal.
5) Ability To Sell & Negotiate:
Selling: It’s a word that is very scary to some people. Many people have a bad perception of what selling really is. They get a picture in their head of a pushy salesman who tries to force or trick them into buying. That is not selling – that is manipulating - and there is a huge difference. The ability to raise investors’ capital is a form of selling and negotiating. Once you get competent at the art of listening to people’s needs and determining if you can offer something that can help meet those needs, that is when you become a professional Joint Venturer.
Selling and negotiating are trainable skills. The more proficient you become at selling and negotiating, the easier your investment life will become. Bottom line - if you can fulfill the needs of your Joint Venture partner as well as your own then all you have to do is learn how to present your deal in a digestible format. If you can do that, very little actual selling is required.
“Little Hinges Swing Large Doors”... This famous quote from W. Clement Stone, who built a billion dollar sales organization out of the depths of the Great Depression, is a great illustration of the power of leverage. Within real estate you can utilize the principle of leverage (i.e. you invest one dollar, and the bank gives you the remaining three dollars for your property purchases).
Now when you learn how to complete successful Joint Ventures, the power of leverage magnifies even further. You may not even have to come up with the initial one dollar investment.
7) Complementary Skills – Build Your Team The Right Way:
Great teams are formed when partners’ skills or assets complement each other. Carefully choose your joint venture partners to ensure they are not bringing the same thing to the table as you are. For example, if you are lacking cash do not match up with someone in the same boat. Same thing goes if you are lacking real estate experience – do not go looking to partner with someone without experience; it will lead you down the path of inaction and frustration.
Be honest with yourself. Identify what you’re lacking and then find someone to fill that void. Remember: joint venture partners can provide you with cash, properties, credit worthiness or investing experience.
For instance, someone could be a fantastic property finder and you can give them a percentage of the deal for finding the property, or they may provide you with an ability to qualify for financing if you cannot qualify on your own. The key step is to take an inventory of the skills and attributes you bring to the deal and look for JV partners that have complementary items to bring to the table.
These are the seven foundational pillars to building successful Joint Venture relationships...and this is just the tip of the iceberg. Implement these pillars into your Joint Venture skill set and you will have a solid foundation from which to grow.
Russell Westcott is a Canadian Real Estate Investor, Educator, Researcher, Best-Selling Author and member of the Management Team with the Real Estate Investment Network (REIN). He uses his personal experience to present his Advanced Buying Strategies™, and Joint Venture Secrets™ that have helped Real Estate Investors think creatively and raise investment capital to buy their next piece of real estate.