A real estate joint venture involves two parties buying a property, with one providing the money and the other involved in day-to-day operations. The agreement details responsibilities and what each party gets at the end. It can include silent partners and should have procedures for disputes and death.
A real estate joint venture involves two parties coming together for the purpose of buying a property. It differs from a partnership because it only involves a real estate transaction, as opposed to an ongoing relationship.
This type of real estate business typically brings together two types of parties. One side tends to be the one putting the money towards the purchase of the property. The second party tends to be the more hands-on person or the one involved in the day-to-day operations of the building or real estate.
A real estate joint venture typically includes a contract or agreement between the two parties involved. The contract or agreement details the responsibilities each party to the joint venture has. The agreement also spells out what each party to the joint venture walks away with when the joint venture ends.
The end result of a real estate joint venture is that both parties involved walk away with a profit or benefit when the deal ends. It is meant to be a mutually beneficial arrangement that begins and ends with a specific purpose in mind.
Some of the elements included in a real estate joint venture agreement include the start date of the real estate joint venture. The agreement also indicates the end date of the agreement, as joint ventures are not perpetual agreements. While the deal may not state a specific date, the end of the deal could be when a certain milestone is reached, as the building sells for a certain amount of money.
The real estate joint venture should also have details of what happens if one of the parties in the joint venture dies. Also, there should be some verbiage in the agreement setting out the procedure in the event of a dispute, disagreement, or some other legal issue between the parties in the joint property agreement.
Silent partners can also be part of a joint ownership agreement. This is an exception to the typical joint venture situation in that silent partners may raise capital for real estate, but are not really involved in the day-to-day operations and real estate situations.
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