The prevailing wisdom around wholesale real estate is as follows: find deals by pulling lead lists and call motivated sellers until you find someone who wants to sell for the right price. This approach works, but if you’ve tried it, you know that it can be difficult and time-consuming.
Entrepreneurship is about solving problems, and that applies to wholesale real estate as well. So if there’s a more efficient way to find deals and get your assignment fees, then there’s nothing wrong with taking advantage of it!
Pursuing joint venture real estate is one way to make your operations more efficient and close more deals in less time. Here are several ways you can joint venture with other real estate investors and leverage their assets to put deals together.
What is joint venture real estate?
Joint venturing is the process of working with other real estate wholesalers to finish deals that you can’t close on your own. Unlike the traditional wholesale real estate approach, which involves finding, landing, and assigning deals alone, joint venture real estate cuts the process in half. You’ll either provide a deal or a buyer and typically receive 50% of the assignment fee as a result.
Two ways to joint venture with wholesalers
If you’re looking to joint venture with other real estate investors, you have two options: you can find a deal and then work with your partner to assign it to a buyer or leverage your buyers list to connect wholesalers who have deals to investors interested in buying them.
Leveraging your cash buyers list to find deals is called reverse wholesaling, and it’s becoming a popular investment strategy. While joint venturing isn’t always a part of reverse wholesaling, it can be a great way to quickly find deals without generating any leads or spending money marketing to sellers. Some wholesalers are focusing almost all of their efforts on building cash buyers lists because they can make the majority of their revenue simply by leveraging their connections.
One important factor to remember when deciding which joint venture route to pursue is that they both involve a similar amount of work and risk. If you want to find deals and work with other investors to find buyers, you’ll devote the majority of your time to lead generation, marketing, and negotiating.
However, if you choose to reverse wholesale, you’ll devote most of your time to building a buyers list, but that doesn’t mean you’ll have guaranteed buyers. Depending on how the economy shifts, you may lose buyers or go through periods where no one is interested in buying property. You may also struggle to find the deals that your buyers are looking for.
Of course, devoting a large portion of time to joint venture real estate doesn’t mean you have to joint venture all the time. It just gives you another option for closing deals without completing all the steps normally involved in wholesaling.
How to joint venture real estate
The first step to joint venturing is choosing which approach you want to take. If you want to be the joint venture partner who brings deals to other wholesalers, then you should follow the traditional wholesale process. Build lists of motivated sellers and distressed properties and target them with marketing campaigns.
Once you have a deal under contract or nearly under contract, you can approach other wholesalers with the details and ask if they’d be interested in connecting you with a buyer. You can also start by asking other wholesalers what kinds of deals they and their buyers are interested in. This will give you a specific type of property to search for, making your efforts much more targeted.
If you want to be the JV partner who connects other wholesalers with quality buyers, your process will be a bit more in-depth. Once you establish a reputation as a reliable wholesaler, you can start building relationships with buyers. Get to know them, their business, and what they want to add to their portfolios. Then you can start finding wholesalers with the deals your cash buyers are looking for.
Finding joint venture partners
There are several ways to find wholesalers to work with. The first is to use social media groups and pages, such as our wholesaler Facebook group. Here you’ll find discussions from other investors and opportunities to create partnerships.
Another great option is to attend BatchService’s monthly real estate webinars (you can watch past webinars here). We encourage attendees to network and form partnerships in the chat, and we’ve watched it pay off for a number of regular attendees.
Finally, you can attend local wholesale real estate events in your community to network and connect with wholesalers. This is also a great way to meet cash buyers and learn more about your market. In fact, we highly recommend becoming a regular at these groups and meet-ups if you can. The greatest investors are the most active in their markets simply because being present opens up opportunities.