How to Reward Your Investors in a Property Joint Venture (JV)

Some pointers on how to how to set the level of reward you and your investors take from a property joint venture deal.

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In this episode:

0:34 - The first factor is supply and demand
0:57 - The second is your comfort factor
1:12 - If this were my first deal

PiB subscriber Andrew emailed in to ask:

“I have had an idea [...] to get 3-4 people together to invest each putting in 5k and the getting a mortgage for the rest. [...] Do you think I should be going into this deal as equals to the others or should I be taking a slightly higher percentage ? I also used to be a plasterer tiler and can turn my hand to plumbing (electrical engineer now) so I will be doing any work needed.”

This is the million dollar question when going into a joint venture with people. The answer boils down to two factors:

1. supply and demand -- if you have loads of investors clamouring to get in on your project then you will be able to get away with taking a higher percentage for yourself, whereas if you are having trouble, you may need to offer more to your investors as a carrot to get involved.
2. your comfort factor -- as you get more experience under your belt you will feel more comfortable raising your share. If I were you and this was my first deal of this type, I would be tempted to take the same return as my investors but make sure that I was paid for the work that I did (perhaps emphasising that I was doing at a competitive rate).

I hope this helps Andrew -- let me know if you have any more questions. 

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