JOINT Venture (Property Development)

[ofw_cebu]

---

I am posting for my friend and this is his situation.

Facts:

1. My friend owns a lot in a commercial area. (just 5 meters from a Public Market, accessible to both pedestrian and vehicle traffic)
2. Currently has tenants (Rice supplier, carenderia, retail shops, etc)
3. Already generating income out of these tenants.
4. He has no plans of selling the property (was approached by Jollibee before, but Jollibee wanted to buy instead of renting)
5. Lot size is 1,500 sqm

Plans:

1. He wants to put up a commercial building (2 storey building with 10-20 units at various sizes from 5sqm to 30sqm per unit)

Questions:

1. He is thinking of Joint venture (him being the land owner), and the other party to develop and put up a building, what is the ideal profit sharing ratio? 60-40, 70-30?

2. What are common terms and conditions with this type of set up?

3. Any other suggestion you can think of considering his circumstances.

Thanks in advance.

[RenDLC]

profit sharing will depend on the total capital invested by each parties....assessed value sa lot and the building will do I guess(ex. lot is valued at 2M, building at 3M for a total of 5M...so it would be like 40%(2M)-60%(3M))...same goes for the maintenance or operating costs if assuming it is not yet earning

not sure about this but I think a contract between the two parties is necessary since I would not just set up a building on someone's lot without a proper agreement

[ofw_cebu]

nice input, apparently the property is worth around 5M mark, wala lang dyud siya money to finance a project or building. Naa pod niduol niya chinese businessman, but ang offer sa chinese kay mo rent at 30pesos per sqm then rent for 30 yrs minimum, wala pod siya sugot kay murag sobra ra pod kagamay, at the moment naa silay tenant sa property pero kanya kanya lang ug tukod mga tenant niya, although dili concrete.

[hitchiker123]

He/she can take out a loan from the bank and use his property as collateral. No need for joint venture. Less people, less hassle.

[lyvonej20]

Loan money. Collateral the commercial lot. We offer business loan. Collateral Clean Title if you want big amount. 1.5% interest per month for residential and commercial, 1.75% interest for agricultural.

NO CO-MAKER OR CO-BORROWER

Better to have 100% of the profit instead of engaging into joint venture. Less hassle.

If interested, contact:

Yvonne Congson
Loan Consultant
0917-752-4876
Lyvonej20@gmail.com

[kosher]

Loan money. Collateral the commercial lot. We offer business loan. Collateral Clean Title if you want big amount. 1.5% interest per month for residential and commercial, 1.75% interest for agricultural.

NO CO-MAKER OR CO-BORROWER

Better to have 100% of the profit instead of engaging into joint venture. Less hassle.

If interested, contact:

Yvonne Congson
Loan Consultant
0917-752-4876
Lyvonej20@gmail.com

21% a Year? wow

[ofw_cebu]

yeah, no business would be getting such a high rate