Partnerships / JV's
JOINT VENTURES
JOINT VENTURES
Co-invest with successful real estate deal-makers to maximize your financial returns.
Harrington Properties, LLC, invests cash equity into existing and to-be-constructed real estate on a joint venture basis with investors, property owners and real estate developers. Harrington Properties seeks attractive returns on its equity consistent with successful real estate development activity in mutually beneficial joint ventures.
Contact US for a joint venture proposal in which Harrington Properties, LLC provides equity, financing, guarantees, development expertise or some combination of these for your next real estate project.
What is a Joint Venture?
A JV agreement is a contract between two or more parties that divides up the investment, the responsibilities, and the profits or losses. You know, an agreement. It’s for those entering into a one-time deal. You aren’t wining and dining here. You’re in and out fast for a quick and tidy profit. Parties usually form a new company to own and operate an investment if it is a long-term deal. For short-term investments, a joint venture does have some great benefits.
Example of Joint Venture Agreements in Real Life
This is a common JV Agreement Scenario for real estate investors. My friend Randy purchased a property with his LLC that he intended to restore and then sell for a profit. Then he hired a contractor, our buddy Johnny. They agreed that Randy would reimburse Johnny his expenses and they would share the profits from the sale, in accordance with the terms of the JV agreement they’ve drafted.
You can add a contractor to your s-corporation or LLC in order to share profits, but that can be a bad idea. If you don’t want to give up a permanent piece of your company, and there are a lot or reasons why you might not want to do that, a JV agreement will bridge can bridge the gap without giving away your firstborn. It is a collaborative contract between companies, rather than a permanent marriage.
By creating a venture-specific LLC, all of the parties acquire some much needed liability protection.
If you find that the arrangement is worth keeping to explore new opportunities, there is no reason why you can’t modify the terms. Maybe this short time fling will become the real thing. Your new LLC will also isolate the JV’s capital and resources in the event of litigation. Your other companies are safe from being liable for this new one.
Is a Joint Venture Right For Me?
As in so many things finance related, your decision really depends on the size of the deal. If you are pushing millions around, the added liability protection of an LLC is essential. If you’re just puttering around with tens of thousands of dollars, as was often the case between Randy and Johnny, that JV agreement is the cheaper option.
JV's work well where the goal is quick cash and in cases where the partners do not qualify for financing. They also let you partner with companies that have different skills than you. The investor/contractor arrangement like Randy and Johnny’s is a perfect match for quick flips on real estate.
In the end, no matter how short-term a deal is, you’re going to have to work with the person you go into business with for longer than you think. Whether starting a new company or signing a joint venture, find people who you trust and who you like to work with. Forge business relationships that have potential for growth and leave the door open for more collaboration. A good deal is an awful thing to waste.
Do you still have questions about your Joint Venture or LLC? Contact us today for help deciding which is best for your situation.