In my most recent Podcast I spoke withAdam Vickers.
He’s been investing for just over 10 years – since 2008. He also runs a local property investment meeting in Redding, which has been running for over three years. It’s a great group of over 50 property investors who get together on a monthly basis with awesome speakers. I’m hoping to drop into one of them this year.
If you want to watch my podcast go ahead and click the link:
But the main points are listed in this blog for you below:
So today we’re going to be talking specifically about a joint venture partners and investors.
So how are you finding JV partners?
Adam: JV partners are interesting. I found a lot of those at mynetworking event. So I would advise anybody who sticks with JV partners. Definitely keep going to networking events and keep talking about what you do. I mean I’ve had a lot of JV partners approach me rather than me trying to find them. It’s because they get to see you on a regular basis, they get to see how you’re growing and developing.
I also get partners from word of mouth. So JV partners, I’ve worked with previously then talk to their friends and family or work colleagues and they’ve come and had a chat with me it’s just really snowballed from there. And so now I have, I have more JV partners than I do deals. My job now is just to go and find projects for them to invest in.
So, are you buying them for you or you, um, how are you structuring this deal?
Adam: So I have three different types of investors:
- I have what I like to call just loan money.They’ve got 40 – 50,000 pounds and they want to loan it out with 6 or 7% interest rates I pay. With regard to the FCA regulations, you can only do that with retail investors. So those retail investors who want to lend me some money, I use that for refurbishments or extensions and stuff.
- The joint venture investor. I will save the big juicy, juicy projects for them. The projects I buy, there’s usually 70 – 80,000 pounds worth capital in. We own the asset 50/50. The rental income will be split 50/50. When we go to sell the project, they will of course get their deposit back and then the profits after that will be split 50/50.
- The angel investors. So I work with a couple of funds and a couple of angel investors. It’s somebody with very large amount of capital, recent interest rate. They very much want you to get on with the job, like a business. So they’re not necessarily investing in your business per se, but they want you to head buying numerous units. We pay them good rates of interest on their money when it’s utilized in a project and then we give them a good return on their capital once we’ve sold the project as well. So yeah, they’re, they’re very, very good in the sense of if you need to execute quickly.
But there’s pros and cons to it, to each one of the groups. So it just depends on the project I’m dealing with.
Are you still finding those people at your networking events as well?
Adam: It’s really interesting because those characters watch you from afar. So quite often the way that they’ve approached me very quickly, here’s a card, come and have a conversation. They don’t usually hang around particularly very long and you don’t always spot them in the room. They will, they will look into and do tons of due diligence and you won’t even know it. They’ve approached me so far, so I don’t have any magic formula.
How are you building trust with these people that you’re working with?
Adam: Any investor I work with who wants to become a joint venture partner that they have to spend at least 15 to 16 hours worth of face time with me, and they have to seem to have the same values that I do. I invest in property for my family so I won’t jeopardize any of that for, for example, a JV partner who is just super keen on putting their money in, trying to turn it around in six months, pulled all their money back out.
I look at them and I go, do I feel like I could leave either one of my children with you? Like you, I like to get to know them over time and build that relationship and trust. I mean, essentially, you’re not that far off really from a marriage in a lot of ways. You’re going to be stuck together with a large asset with a lot of money, a lot of risk involved for a period of time. You need somebody who’s got their head screwed on and somebody can have a great relationship with.
I make my investors do dummy runs with particular projects. So I put them in front of them and say, how would you approach this? Or what would you do? And then I have example scenarios where things might go wrong and I’d like to see their approaches.
It gives me a good idea because in this game, like any game talk is cheap. People can say whatever they want to say, but I like to watch people’s body language, listen to the tone in their voice, and really get a good understanding of the, of the real them rather than the almost the on show them.
Can I ask you top five property investment tips?
Adam:
1.Only invested in an area that you know, like the back of your hand.
2. Make sure you build a long term lasting relationships and appreciate the fact that it could take you months before you get, for example, JV partner or a decent broker or anything like that. But realize you’ve got to put in the growth and effort, uh, for for a number of months and that may not involve you getting paid.
3. The property game. It depends on which part of the property game you’re in, but usually it’s a bit like feast and famine. You’ll find that you spend tons of money out on a project and you’re not going to get your money back for 18 months to make sure that you really focus I’m trying to run your business on the bare minimum.
4. Make sure you treat everybody in the process with respect: that ranges from tenants to brokers to the cleaners, gardeners, to anybody. Make sure that you get on really well and make sure that everybody’s heard and listened to you find you have far fewer issues, whether that’s management or buying.
5. The best deal was that I’ve ever got was from understanding people’s needs and giving them a solution that suited their needs. It’s got nothing to do with you, it’s got to do with the seller. So if you suit their needs, they will come down in price.
Is this information helpful for you? Leave me some comments below!
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Natasha
