Most investors think that the only way to finance deals, when their bank account hasn’t got enough in it, is to joint venture (JV). To maximise your return on investment there is a JV Pro-Fit Retainer strategy.
Stop giving away 50% of your deal’s profits when you joint venture and, if you do decide to set up a joint venture stay on the right side of the FCA.
The key thing to remember is that the Financial Conduct Authority (FCA) states that you must only joint venture with someone who is categorised as a sophisticated investor. That means you need to know about PS13/3 and what constitutes a sophisticated investor and there are seven main criteria for these.
The downside of a JV partner is that they will usually want up to 50% of the profits – regardless of who does all the work. No bridger wants 50% of your profits, so why give your profit away needlessly?
There are a number of situations where your experience to date falls short of the criteria lenders demand you meet before they will lend to you
If you really can’t get funding for any of these reasons find someone who has the experience you lack, bring them on the deal with you this one time. From then on you can legitimately claim to have this level of experience with a project that you were part of to prove it.
With bridging as your means of finance you can be independent, make decisions without consultation and - best of all - keep all your profits!