The number-one question we hear at real estate conferences is how to make the jump from investing with your own money to investing with joint-venture money. When we made the leap to JV funds, we had no choice but to use someone else’s money because we had none of our own. We wish everyone could be so lucky as to have that problem.
JV partnerships are not the only way – and they may not be the best way for you – but they have had an undeniable impact on our ability to grow our portfolio, allowing us and our partners to accomplish more together than we could have apart.
What’s the biggest barrier to overcome when looking to raise JV money? Over the years, we have not only experienced it ourselves, but we’ve also seen the truth of it in our clients: We get in our own way.
So the best piece of advice we can give is to get over yourself.
You are your biggest obstacle – not money, not finding the right person, not suboptimal advertising, not a lack of time. The toughest part of finding a JV partner is forgetting a lot of the conditioning we’ve all come to believe. Here are some examples:
Asking people for money is for losers. It’s rude and presumptuous to think I deserve to ask someone for their money.
This is something that was heavily ingrained in us. We come from a culture where pride is considered a virtue, so asking someone for money is seen as a sign of weakness. But that is an example of thinking emotionally, not logically. Look at it from your partner’s side. They need your time and your experience. By asking for their money, you are actually offering them an opportunity.
I have very little experience. Who on earth would give me money?
One man’s trash is another’s treasure. Those who have no time value it more than anything; they aren’t acquiring more of it.
When a person short on time sees the value of investing but knows they can’t give it the attention it needs, having a partner who can is invaluable. Ask anyone who is short on time, and they’ll tell you what an asset it is. Don’t undervalue this limited resource just because you have plenty of it. It’s a priceless asset.
Other obstacles we often put in front of ourselves:
- Fear of rejection – what if I ask and they say no?
- Sweating every little detail with fullblown anxiety
- Being a perfectionist and waiting until you have every detail perfect before pursuing a partner
- Being selfish and wanting the whole pie for yourself – 50% of 10 pies is better than 100% of one
- Thinking you can do it all by yourself
There are so many things that hold us back from achieving our goals. Looking at that list, you can see how many of them are of our own creation.
Hindsight being 20/20, we can now look back and see that we made a lot of people a lot of money – and it’s money they never could have made without us. We needed each other to succeed. It’s a pretty cool reason to keep pursuing it.
What’s your roadblock?
When you think of approaching people about joint-venturing with you, what’s behind the feeling of dread or uncertainty that crawls up on you? Once you acknowledge it, come up with a game plan to bypass it. Or do what we did and just keep putting one foot in front of the other, getting the word out by whatever means you can imagine, and watch the conversations start to unfold.
Most people will say no to you. Only 13% of the people we approached about investing with us actually said yes. But keep plugging away. Talk about what you’re doing, mention it in conversation and then see if people start asking questions. Make it an everyday part of conversation, and the people who are interested will find you. You’ll soon notice that those conversations get longer every time you have them.
Corey and Tiffany Young are the founders of InvestorOnFire. To find out more about their strategies and to view pre-analyzed properties across Canada, visit investoronfire.com.