JVDeals is the only platform for established and upcoming real estate developers to find land for their next joint venture projects. Through JVDeals, land owners, builders and agents can post their property as well as their specific requirements including minimum and maximum area, location, type of project, etc. for joint venture developments. They can also search a land parcel using various criteria.
The present real estate scenario makes it next to impossible to find a suitable land. Price of land, project cost, and accessibility are among a few reasons which deter a man from having his dream project. Even if someone finds a property it isn’t always affordable. Hence, we came up with solution – a solution that is JVDeals.
JVDeals connects builders and landowners for the formation of joint venture. We offer builders several land parcels that meets their requirements so that they can choose the one they like best. We also connect landowners to several builders so that they can form partnership with whom they like most. And as such both builders and landowners have more options to choose from. We facilitate and coordinate the entire process for a seamless execution of the deal and a smooth experience for our clients.
What is a Joint Venture (JV) Deal?
Off late demand for joint ventures in real estate has been increasing exponentially. In real estate, JV means that a project is developed by two parties jointly. For example, one party is the land owner and the other party is a developer. Land owner either does not have funds and/or expertise to develop the property and developer does not want to block his funds by purchasing the land. Through JV land owner contributes land to the partnership and the developer builds the structure. When the project generates revenue, it is divided between land owner and developer in an agreed proportion.
The reasons behind forming a joint venture include business expansion, development of new products, opportunity to discover new market, accessibility to established markets and distribution channels.
Joint Venture model is mutually beneficial for both land owner and developer.
For example, consider a piece of land that is 10,000 sq ft in size located on 40 feet road. At INR1,000 per sq ft, this land is valued at INR1 crore. The land owner can sell this land for INR1 crore if he finds a buyer which is difficult in this market. The other option for the land owner is to get into a joint venture with a developer. If he forms a JV on 10,000 sq ft land on 40 feet road a G+3 building can be built. Approximately 26,000 sq ft that can be constructed by the builder on this land at a cost of INR 1,300 per sq ft. At this rate, the construction of the building will cost approximately INR3.4 crores. Based on the cost of land and construction cost, land owner will get INR10 lakhs as advance (that is 10% of land value) and 20% share in the building. And this building will take approximately 10 months – 1 year to be completed.
On 26,000 sq ft, the super built up area will be 32,000 sq ft and this can be sold at a minimum rate INR2,600 per sq ft. At this rate total revenue from selling the apartments will be INR8.3 crores. Out of this 20%, that is INR1.66 crores, will go to landowner and INR6.64 crores will go to the builder. So the land owner gets a total of 1.76 crores (advance plus money from selling) by contributing land worth INR1 crore after 1 year. And builder gets INR 6.64 crores by spending INR 3.5 crores (3.4 crores for construction and 10 lakh advance) after 1 year.