As we have stated in a previous article on Joint Ventures, a high number of large real estate projects are financed and developed as a result of Joint Ventures. But not only large plots can be developed through JVs- even relatively smaller plots can be developed using the same method.
Joint Ventures, therefore, can be profitable, not only for land owners with land plots measuring in hectares, but also those with as ‘little’ as 1000 sqm or less! If you fall in the latter category, you should seriously consider a JV, as it may bring in the highest profit for you.
Beyond putting up your land for a JV however, there are certain salient questions you must ask a Property Developer before engaging them in a partnership. The answers you get would be very helpful in guiding you to ascertain whether they are a right fit for you and if you should proceed with them. Or not.
May I See Your Portfolio?
This is, very often, the first question to ask a property developer. Every property developer worth their salt has a portfolio- and they’re often proud to show it. This may be their websites, or social media handles or a brochure. Viewing their portfolio allows you to assess the quality of their work as well as their skill and competence and helps you decide if you’d like to work with them.
What Development Options Are Available for this Property?
If you love what you see in their portfolio, then it is time to talk about your project. Your land plot may be able to take some apartments blocks, or terrace duplexes, or a number of semi-detached. A seasoned Property Developer, when asked this question, must be able to give options as well as advise on the pros and cons of each, based on location, cost and your unique needs, and help you make the best decision.
What Is the Project Lead Time?
Though, timeline for completion for different projects varies, an experienced Property Developer with enough work history can give their best estimate which is often fairly accurate. In giving a suitable project timeline, which can be broken down into milestones, both parties can keep track of progress.
How Do We Start?
When you ask a Property Developer about the process for a proposed development on a property, they should be able to provide you with their standard procedures. Property development involves a multitude of steps, which includes coming up with designs, managing contractors, handling finances, etc. A property developer with a designated process of handling things from start to finish is an asset.
How Much Would This Cost?
It is advisable that discussion on cost and profit-sharing comes last. This is because, as important as these are, there are other parameters that are far more important. Without those parameters in the proper place, a project can quickly fail. When you do get to discuss costs and profit sharing, however, be sure to avoid developers that promise astronomical profits and unrealistic figures in impractical timelines, especially when not backed with verifiable facts and figures. As a rule of thumb, if it looks too good to be true, it probably isn’t.
Finding the right real Property Developer does require time and often painstaking search. In the end, however, if you do not rush into choosing without due diligence, it is always worth it when you do find the right fit and can lead to a very profitable partnership.