When I started investing in property my two major challenges were finding deals and finding the cash. It can be very hard to find a good deal! In my experience most deal sourcers offer deals that simply do not stack up. Property investing is a very capital intensive business and for me not having enough cash was the main challenge. What was also clear from the beginning was that I certainly did not have enough cash to execute my long term vision. While some people will tell you that you can build a portfolio without any experience or your own money, this was not really the route I personally wanted to follow.
Bank finance was a good start but I would still need at least 15% of the purchase price as the deposit each time I wanted to grow my portfolio, not to mention the other buying costs.
I focused in on Joint Ventures (JVs) for a number of reasons since they are such a great way to access capital:
i) At a reasonable cost
ii) On terms you can pretty much define as the arranger of a deal
iii) Allow pooling of funds for have a much bigger pot (therefore doing bigger deals and magnify your returns)
iv) Investing in someone else’s deal as a JV partner means you can gain greater experience in areas you lack in, take a hands-off approach if you choose, and share the risks/rewards with the JV partner.