Developing Successful Real Estate Joint Venturesby Paul Wright Tax Accountant Toronto - A Simple Checklist for Ch
In the real estate industry, opting for the joint ventures is one of the common practices in case of large real estate projects. However it is necessary taking care of several aspects in developing successful real estate joint ventures. People and realtors aiming to develop such joint venture should understand the basics involved in the process.
Understanding Real Estate Joint Venture
What is a real estate joint venture? It is basically a contract between two parties involved in developing and implementing real estate projects. One of the parties is the builder that is undertaking the implementation part of the project whereas the other one is joint venture real estate investors taking care of the financial part of the project. Thus the joint ventures in real estate can be viewed as the business arrangement where two or more parties join hands and invest their resources for accomplishment of a real estate project.
A Partnership that Works Well
Basically the joint venture helps the operators in the field of real estate industry to manage and develop the real estate projects combining with the estate capital providers. Either or both of the parties can be individuals or organizations offering their resources and services. Joint venture is a common practice in case of build to suit commercial real estate because these projects require large capital investments that often the builders are not able to meet on their own.
How Real Estate Joint Venture Works
To understand how the real estate joint venture works one can take an example. A company owns a piece of land in some part of the country but is not physically located there. But they want to develop a real estate project there. To ensure that the project is completed successfully, they approach a local builder or realtor agency to take care of the physical implementation part of the project. On the other hand the contract providing company located outstation takes care of the financial investment part. To ensure that there is no overlapping or confusion, clear terms and conditions are put in place in the contract defining specifically the rights and responsibilities of each of the parties in the project management.
Players in the Real Estate Joint Venture
Successful real estate joint venture depends on the players in the venture playing their respective parts with honesty and dedication. For instance; the operating members of the joint venture or the real estate development companies assume the responsibility of daily operations as well as management of the project. Generally such operating members are highly experienced professionals working in the real estate industry and they have the ability to source, manage, acquire, as well as develop the real estate project.
On the other hand the capital operators or the real estate investment companies take care of financing a large part of the real estate project or even the entire project as the case might be. Each player is responsible for losses, costs associated with the venture, and profits earned. Basically the joint venture is a complete and separate entity different from other business formats and interests.
Created on Aug 14th 2018 01:20. Viewed 209 times.