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What is a JV Wholesale Deal?

Knucks after a JV wholesale deal
JV wholesale deals are a great way to get started as a wholesaler, especially if you don’t have many relationships with cash buyers.

Joint Venture Wholesaling

When someone asks you if you want to do a JV wholesale deal, what exactly that does that mean? Well, let’s start with the basics. JV stands for joint venture. A joint venture is a business partnership between two entities where each brings something of value to the table. It’s a strategic partnership that benefits both sides. This is also known as joint venture wholesaling or “co-wholesaling”.

In wholesaling real estate, forming a joint venture with someone on a deal can help get the deal done faster. Let’s say I found a great deal and put it under contract, but I don’t have any cash buyers in the area. One might argue, why would you put a deal under contract with the intent of wholesaling it if you don’t have any buyers? Good question. In many cases, that is probably not a good idea. Unless you are prepared to buy it yourself. However, if you roll your sleeves up and do a little bit of research, there is a good chance you can find another wholesaler who does have buyers in that area. BINGO.

The concept is simple. You work together, split the profits 50-50. Win win.

How To Initiate a JV Wholesale Deal

Initiating a JV wholesale deal is easy if you have a deal. Contact another wholesaler and tell them about your great deal. The other wholesaler will send the deal to their buyer’s list and see if they can find a cash buyer. Most wholesalers are cool with joint venture wholesaling. If you think about it, why wouldn’t they be? This other wholesaler spent maybe 15 minutes out of his day to make 5, 10 maybe even 15k by taking your deal and sending it to his buyer list.

Sure, you are giving away some profit in this deal. However, if you’re a new wholesaler without as many cash buyers, there’s a good chance you might not find a buyer at all. You went from potentially making nothing and having to weasel your way out of a contract to earning a good assignment fee by co-wholesaling.

Most JV wholesale deals I have been apart of have netted me a minimum of 5k. Sometimes they can be 15k or more! The standard rule of thumb is splitting the deal 50-50. You bring the deal, they bring the buyer. It takes 2 to tango baby. You can certainly ask for more- or tell the other wholesaler you will give them a fixed amount (5k) if they find a buyer. That’s up to you. Depends on the spread, right?

Don’t try to do it all on your own

Bottom line, it’s ok to ask for help in this business, especially when you’re just starting out and you don’t have a lot of buyer relationships. Remember, wholesaling real estate is not a get rich quick scheme, but you can see results pretty quickly if you start with joint venture wholesaling,

JV wholesale deals are a great way to move your deals quickly, without stressing too hard about finding a buyer. Once you’ve built a massive buyers list like me, wholesalers will start calling you to JV wholesale their deals!

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About the author: Ryan hovers around a 10-20 handicap any given day. But the talent is there, no question.