The Importance Of Due Diligence When Choosing Your Joint Venture Partner
When it comes to the property industry, you have to put an awful amount of time and effort in to get everything right. You cannot become a success overnight by just investing in any old project. It takes attitude, experience, education, instinct and lessons learned in order to move up the property ladder. When starting out, you will for sure make mistakes. Take it from me – I’ve been there, done that, got the postcard to prove it! And I’m still learning to this day. But one very important distinction is that I’m also teaching others, and that’s where experience comes in.
One lesson you’ll definitely learn is the importance of doing your own due diligence.
What is Due Diligence?
Due diligence is an investigation into a matter under consideration to confirm certain details. For property, doing your due diligence will require an examination of financial records before entering into a proposed transaction with another party. This is to ensure that said party is who they say they are, indicating what you are getting yourself into beforehand.
Why is it so important when choosing your Joint Venture Partner?
In essence, you are de-risking the entire project from the get-go. You are actively taking legal steps to prevent corruption and money laundering as well as financial consequences and reputational risks. If you go into a Joint Venture blind, it will end in disaster. Knowing who you’re dealing with ensures that the risks of the partnership are minimised.
You are entering into a Joint Venture for one reason and one reason only – business. And doing everything to proceed to the next step in a company requires careful consideration and strategic planning. Everything has to be right. You need to make a profit with this Joint Venture so that the business grows. If you do not, then you’re only going backwards. The right partner will ensure that you achieve what you need to and more. The wrong one will only help achieve the opposite.
The advantages of due diligence outweigh the disadvantages, sure. But one mistake can cost you a fortune – something you can’t afford to let happen. So make Due Diligence top of your to-do list.
How can you do your own due diligence?
In short, create a checklist. Firstly, ask yourself if you are ready for the Joint Venture. Then, analyse your own business compared to others to see where they can lend a helping hand and how.
Then it is a matter of choosing the right partner. Compare and contrast potential suitors to see which one is right for you. Do they fit in well? How can they help? Be confident in their abilities.
Prepare documents ready for the Joint Venture to begin. First, ensure you have a business plan, marketing plan, and cash flow projection at hand. Then make sure you both know who is investing what and in which form. Where is the money coming from, and how will it all work?
Then get to implementing the Joint Venture by setting out terms and conditions. Get it in written form and straighten out all the legal information as well as objectives needed for success.
Agree which partner has responsibility for sales activities, marketing activities and new business generation. The business plan and marketing plan needs to address this formally.
When it comes to termination, cover the exit strategy for both partners, what happens to assets and any liabilities which may have occurred during the Joint Venture partnership.
After this has all been checked off, you should be good to go!
Do your Due Diligence on me, John Howard.
And finally, you may be wondering about my own Joint Venture partnerships. Well, that’s why you’re here, right?! If so, then I strongly encourage you to do your own due diligence on me in order to cover your own back. Implement all the above steps and give yourself a better idea of what you’re getting yourself into. And yes, I will, too, once you have gotten in touch with me.
Having spent four decades in the property industry, I have built up a wealth of experience that has guided me to where I am today – a successful property expert. My proficiency stems from purchasing and selling over 4,000 houses, apartments, and developments within the UK. And through all of this, I have formed many valuable partnerships with leading industry contacts, adding breadth and depth to my own expertise and knowledge.
Not only that, but I’m also a published author on various property subjects and regularly appear on SKY Channel 191 co-producing and starring in Property Elevator and The Property Graduate. Along with that, I also hold regular seminars and visit property events discussing and teaching.
My side of the partnership will see me provide you with the full finance required to purchase and carry out the development of your project, subject to due diligence. You can benefit extensively from me and my team’s vast experience and expertise when and where required. So, to start, please complete this short form, and one of my team members or I ensure will review it within 24 hours. Then we will get back to you with our feedback and where we can both go next.
Join me on a Joint Venture today!
If you would like more information on our joint venture agreements, please get in touch today. Send your queries to firstname.lastname@example.org, and we will reply as soon as humanly possible. We hope to hear from you in due course and greatly welcome your interest!