Maximizing the Benefits and Avoiding the Pitfalls of a Joint Venture

In real estate, a joint venture brings together two parties in active investment. Most of the time, this is a significant agreement to be reached by both sides. You must meet your needs, but you also don’t want to kill a good deal. Moschetti Law Group has helped many organizations tread this fine line and make great deals for all parties.

The joint venture may be recognized as its own entity for tax purposes and would not be considered a security, nor would it be subject to securities laws. Given the potentially complicated legal nature of joint ventures, it can help have experienced real estate attorneys on your side to help clarify the capital contributions, profit distributions, and management strategy for this undertaking. Contact Moschetti Law Group to get expert legal advice on your Joint Venture today.

Benefits of Joint Ventures:

  • Fewer legal fees
  • Not beholden to securities laws
  • No reports to submit to the SEC
  • Less paperwork than syndication

Potential Pitfalls of Joint Ventures:

  • Uncommunicated or unclear expectations and objectives
  • Imbalance of responsibilities
  • Partner disputes
  • Restricted outside activity
  • Increased liability

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The terms of a real estate joint venture agreement are incredibly important. These will dictate how you distribute profits between you and your partner, and how much money is expected from you upfront. As you may well know, money can be a source of heated arguments and even partnership dissolutions. In some cases, it can even lead to lawsuits.

After finances, the next most significant element of a joint venture agreement is the expectations for operations and management. What will the service provider do, and under what timeline? What are you expected to do if things don’t go as planned, and how will you run this operation together? Also, it behooves both partners to have a clear exit strategy should one become necessary. This helps avoid costly, time consuming, and stressful dissolutions.

An experienced real estate attorney can help you organize your joint venture from the beginning so that you and your partner reap all the benefits and steer clear of the pitfalls. No one goes into a real estate partnership planning to end up in a lawsuit, and we want to help set you up for success.

Partnerships often include one entity ready to provide services, and one prepared to provide capital. These can be excellent opportunities on both sides of the real estate joint venture agreement, allowing for greater investment and reach than either party could have managed on their own. Sometimes, businesses fall into the trap of limiting their own business during the operation of the joint venture, but this can be avoided if the objective, plan, and agreement are carefully thought out and reviewed. This is where an experienced real estate attorney can be incredibly helpful. We know which questions to ask and which points will be most salient when drawing up or reviewing joint venture agreements. We know how to spot potentials for those common pitfalls and safeguard your time and interests as the service provider and your money as the capital source.

Moschetti Law Group has helped investors and service providers form joint ventures from the ground up. We’ve even worked with tax-exempt entities in joint ventures with taxable entities. Whether for acquisition or development, the real estate attorneys and Moschetti Law Group have experience forming joint ventures on all property types, including commercial retail, mixed-use, and office parks, and residential single and multifamily properties and developments. We also have experience representing joint ventures in office and medical property development.

Let us help you create your real estate joint venture in a way that combines expertise in development, product, and specialized knowledge with capital from public and private funds, high net worth individuals, and tax-exempt investors.

If you need a joint venture agreement created or a proposed joint venture agreement reviewed, set up a free, no-obligation strategy session by clicking here or calling us at 818-696-5007

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