Outer JV End-to-End

Rick is a family member who has often talked about tackling a modest townhouse project.

I had done all the hard work examining this site and negotiating on behalf of a client, and minutes before signing she pulled out due to unfortunate life circumstances. The vendors were extremely motivated, and willing to accept $150k less than the offer they rejected pre-auction 2 weeks prior. I called Rick up and he said “Let’s do it”.

Joint Ventures can work many different ways. In this project, Rick purchased the property and wore the debt finance. I funded all the planning and design work, and shared the holding costs (mortgage debts less rental income, land tax, council rates, etc) and the build costs 50/50.

It was a hard slog with a duplicitous and aggressive Council, and after having a multiple cracks at 4 townhouses we ultimately settled for 3 large, fully detached, street-facing houses.

Once the permit was secured and all construction documents completed, I looked after the build tender. A couple months in and COVID hit. Thankfully, the Construction Industry remained operational, but wow it was challenging. What a crazy time.

Rick chose to sell 2 of the completed townhouses and keep the 3rd as an investment property. We split the profits 50/50.