A real estate joint venture business is a business that involves two or more real estate businesses pooling their resources and expertise to achieve a particular goal or develop a real estate project. In a Joint venture business, the risks and rewards of the enterprise are also shared.
The joint venture business model allows real estate operators (individuals with extensive experience managing real estate projects) to work with real estate capital providers (entities that can supply capital for a real estate project).
Please note that real estate joint venture businesses are not taxed because profits made from a joint venture flow through to the individual members of the venture, the portion of the profit that each member receives is claimed on that member’s individual or corporate tax returns. The venture itself does not make a tax filing on any of the funds that flow through it.
Steps to Write a Real Estate Joint Venture Business Plan
-
Executive Summary
King’s Signature® Real Estate Group, Inc. is a standard and registered real estate joint venture that will be located in Miami, Florida but with an active presence and network all across major cities in the United States and the globe.
We have been able to secure all the necessary permits and licenses required for us to participate in real estate projects in different countries of the world. King’s Signature® Real Estate Group, Inc. is made up of two thriving real estate companies in the United States of America.
Emmanuel Morgan and Austin Tyler are the founders of King’s Signature® Real Estate Group, Inc.
-
Company Profile
a. Our Products and Services
King’s Signature® Real Estate Group, Inc. will be involved in;
- Houses and housing estate developments
- Apartments and other residential developments
- Commercial developments
- Industrial developments
- Other developments (Investment Properties)
- Real estate consultancy and advisory services
b. Nature of the Business
King’s Signature® Real Estate Group, Inc. will set up the Real Estate project as an independent limited liability company (LLC).
The parties sign the joint venture agreement, which details the conditions of the joint venture such as its objective, the contribution of the capital member, how profits will be split, a delegation of management responsibilities for the project, ownership rights of the project, etc.
Please note that a real estate joint venture is not limited to an LLC. Corporations, partnerships, and several other business arrangements can all be used to set up a joint venture. The exact structure of the JV determines the relationship between the operator and the capital provider.
c. The Industry
King’s Signature® Real Estate Group, Inc. will operate in the real estate sales and brokerage industry.
d. Mission Statement
Our mission is to be at the forefront of buying property and partnering with landowners, then develop a plan for what to build or rebuild on that property. We will bring in investors and predict how much money the new homes or businesses will bring in.
e. Vision Statement
Our vision of to be listed among the top three real estate joint venture companies in the United States of America.
f. Our Tagline (Slogan)
King’s Signature® Real Estate Group, Inc. – Your Reliable and Trusted Real Estate Company!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
King’s Signature® Real Estate Group, Inc. will be formed as a Limited Liability Company (LLC). Under this arrangement, each member of the joint venture is liable for profits and losses relating to the business. However, this liability only extends as far as the project for which the joint venture was created.
h. Our Organizational Structure
- Chief Executive Officer
- Project Manager
- Company’s Lawyer/Secretary
- Admin and HR Manager
- Head of Construction and Renovation
- Business Developer/Sales and Marketing
- Accountant
- Customer Service Executive / Front Desk Officer
i. Ownership/Shareholder Structure and Board Members
- Emmanuel Morgan (Founder and Chief Executive Officer) 35 Percent Shares
- Austin Tyler (Co-Founder and Chief Operating Officer) 35 Percent Shares
- Harrison Williams (Director) 10 Percent Shares
- Charles Abraham (Director) 10 Percent Shares
- Stella Norman (Board Member and Secretary) 10 Percent Shares.
-
SWOT Analysis
a. Strength
- Managing partners bring industry expertise and put time and effort to manage the project, while limited partners provide the capital required to fund the project.
- Ideal location for property development (thriving real estate market)
- Access to finance from business partners
- Robust relations with property owners and properties investment moguls
- Good returns on investment for investors.
b. Weakness
- A new business that will be competing with well-established property developers and other real estate joint venture companies
- Inability to retain our highly experienced and qualified employees longer than we want
c. Opportunities
- Miami, Florida is a thriving market for property development companies and the real estate industry.
- Good support structure for real estate joint venture companies.
i. How Big is the Industry?
The market size of the real estate sales and brokerage industry that real estate joint venture business is a subset of was put at $156.2 billion in 2021 hence it will be safe to safe the industry is amongst the biggest industries in the United States of America.
ii. Is the Industry Growing or Declining?
Beyond every reasonable doubt, all available data points to the fact that the real estate and brokerage industry is growing. The market size of the industry is expected to increase by 0.4 percent in 2021.
iii. What are the Future Trends in the Industry
The real estate sales and brokerage industry cum real estate joint venture line of business are changing, and players in the industry are improvising. No doubt, technology and climate change (the go green initiative) will change the landscape of the real estate sales and brokerage industry going forward.
iv. Are There Existing Niches in the Industry?
No, there is no existing niche idea when it comes to real estate joint venture business. This is so because the real estate joint venture line of business is a subset of the real estate and brokerage industry.
v. Can You Sell a Franchise of your Business in the Future?
King’s Signature® Real Estate Group, Inc. has no plans to sell franchises in the nearest future but we will open our doors to accommodate more partners and investors in the nearest future.
d. Threats
- The arrival of new real estate companies within our market space
- Unfavorable government policy and regulations
- Community resistance
- Liability problems
- Continuously changing consumer demands especially as it relates to style and design of properties et al.
i. Who are the Major Competitors?
- White Star Real Estate
- New World Development Co. Ltd
- Wheelock and Company
- AvalonBay Communities
- Greystar Real Estate Partners
- Wood Partners
- Mill Creek Residential
- Continental Properties Company, Inc.
- Trammell Crow Company
- The JBG Companies
- Lowe Enterprises
- Simon Property Group
- General Growth Properties
- Kimco Realty Corp
- The Allen Group
- Panattoni Development Co.
- McDonald Development Co.
- USAA Real Estate Co.
- LaSalle Investment Management
- Gibraltar Syndication & Development Company
ii. Is There a Franchise for Real Estate Joint Venture Business?
Well, for now, there are no known franchise opportunities for the real estate joint venture business.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Real Estate Joint Venture Business?
Yes, there are county or state regulations and zoning laws for the real estate joint venture business, and players in this industry are expected to work with the existing regulations governing such business in the county or state where their business is domiciled.
Zoning laws are found in virtually every municipality in the United States, affecting land use, lot size, building heights, density, setbacks, and other aspects of property use.
-
Marketing Plan
a. Who is Your Target Audience?
i. Age Range
Our target market comprises adults above 18 years who have the finance to do business with us.
ii. Level of Educational
We don’t have any restrictions on the level of education of those who we are ready to work with as investors or buyers of the properties we develop.
iii. Income Level
The income level of those we are looking to do business with will be between $70,000 and above $124,000.
iv. Ethnicity
There is no restriction when it comes to the ethnicity of the people we are looking forward to partnering with.
v. Language
There is no restriction when it comes to the language spoken by the people we are looking forward to partnering with.
vi. Geographical Location
Anybody from any geographical location will be welcome to partner with us or do business with our company.
vii. Lifestyle
King’s Signature® Real Estate Group, Inc. will not restrict any investor or client from partnering with us or doing business with us based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Host Themed Events That Catch Attention.
- Tap Into Text Marketing.
- Make Use of Bill Boards.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource
- Develop Your Business Directory Profiles
- Build Relationships with players in the real estate and brokerage industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (coupon books, billboards), and referral (also known as word-of-mouth marketing).
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market and potential target market.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, King’s Signature® Real Estate Group, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package for each property. All our pricing strategies will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
-
Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the real estate and brokerage industry, and freelancers to help refer clients to us.
King’s Signature® Real Estate Group, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have visible, in-demand properties that are competitively priced for our customers.
b. Inventory Strategy
The fact that we will need the required building materials means that King’s Signature® Real Estate Group, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse.
We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.
c. Payment Options for Customers
Here are the payment options that King’s Signature® Real Estate Group, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Return Policy, Incentives, and Guarantees
At King’s Signature® Real Estate Group, Inc., we buy and develop properties, and the nature of the products (properties) we offer does not accommodate a return policy, but we will guarantee our investors of good returns on their investment (ROI).
e. Customer Support Strategy
Our customer support strategy will involve seeking customer feedback. This will help us provide excellent properties, return on investment (ROI), and customer service to our clients and investors. We will work with effective CRM software to be able to achieve this.
Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
-
Operational Plan
We plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting investors that will enable the firm to boost our properties and service offerings and support revenue growth.
a. What Happens During a Typical Day at a Real Estate Joint Venture Business?
- The office is open for the day
- Documentation and other administrative works are conducted throughout the day
- Marketers go out to market our properties and services
- If there is an ongoing property development project, the required team and machinery are sent to the field to carry out the project.
- The team and machinery return to base (office) after the day’s job
- The report for the day is written and submitted to the required authority
- The office is closed for the day.
b. Production Process
There is no production process when it comes to real estate joint venture business except for the construction of properties.
c. Service Procedure
No, there are no defined service procedures for a real estate joint venture business.
d. The Supply Chain
King’s Signature® Real Estate Group, Inc. will rely on key players in the real estate and brokerage industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale supplies of building materials et al.
e. Sources of Income
King’s Signature® Real Estate Group, Inc. makes money from;
- Houses and housing estate developments
- Apartments and other residential developments
- Commercial developments
- Industrial developments
- Other developments (Investment Properties)
- Real estate consultancy and advisory services
-
Financial Plan
a. Amount Needed to Start your Real Estate Joint Venture Business?
King’s Signature® Real Estate Group, Inc. would need an estimate of $4.5 million to successfully set up our real estate joint venture business in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.
b. What are the Costs Involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding and Promotions – $5,000.
- Business Consultant Fee – $2,500.
- Insurance – $5,400.
- Rent/Lease – $200,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $100,000
- Start-up Inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $80,000
- Liquid Cash for Execution of Projects: $3.5 million
- Website: $600
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much will it cost?
King’s Signature® Real Estate Group, Inc. will not build a new facility for our real estate joint venture business; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.
d. What are the Ongoing Expenses for Running a Real Estate Joint Venture Business?
- Transportation cost
- Cost of building materials and supplies
- Utility bills (internet, phone bills, signage and sewage et al)
- Salaries of employees
e. What is the Average Salary of your Staff?
- Chief Executive Officer – $85,000 Per Year
- Project Manager – $72,000 Per Year
- Head of Construction and Renovation – $70,000 Per Year
- Company’s Lawyer/Secretary – $68,000 Per Year
- Admin and HR Manager – $45,000 Per Year
- Business Developer / Sales and Marketing – $42,000 Per Year
- Accountant – $40,000 Per Year
- Customer Service Executive / Front Desk Officer – $30,000 Per Year.
f. How Do You Get Funding to Start a Real Estate Joint Venture Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks.
-
Financial Projection
a. How Much Should You Charge for your Product/Service?
At King’s Signature® Real Estate Group, Inc. our fee will be based on the location and type of property we want to develop.
b. Sales Forecast?
- First Fiscal Year (FY1): $3.5 million
- Second Fiscal Year (FY2): $5 million
- Third Fiscal Year (FY3): $9 million
c. Estimated Profit You Will Make a Year?
The ideal profit margin we hope to make at King’s Signature® Real Estate Group, Inc. will be between 16 and 20 percent on development costs.
d. Profit Margin of a Real Estate Joint Venture Business
King’s Signature® Real Estate Group, Inc. will collect developer fees that will range from 5 percent to 10 percent aside from making profits off every property sold.
-
Growth Plan
a. How do you intend to grow and expand?
King’s Signature® Real Estate Group, Inc. will grow by opening other offices in key cities in the United States of America within the first five years of establishing the business and then expand to other continents by welcoming more partners.
b. Where do you intend to expand to and why?
King’s Signature® Real Estate Group, Inc. plans to expand to Los Angeles – California, San Francisco – California, Chicago – Illinois, Washington, D.C., Boston – Massachusetts, Miami – Florida, Seattle – Washington, Dallas – Texas, and Philadelphia – Pennsylvania.
We intend to expand to these geographic locations because available statistics show that the cities listed above have the highest and most thriving real estate markets in the United States.
-
Exit Plan
The business relationship in a joint venture will typically last anywhere from 5 to 7 years. This is so because joint ventures are formed with a unique business goal in mind and are generally dissolved once the goal has been achieved.
But the founders of King’s Signature® Real Estate Group, Inc. plan to exit the business via merger and acquisition. We intend to merge with an international real estate company that has a world spread so that the company can be placed under a trusted hand when the founders retire.
The goal of combining two or more real estate companies on a global scale is to try and achieve synergy – where the whole (the new company) is greater than the sum of its parts (the former two separate entities).