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Joint Venture in houses construction
Rank: New-farer Joined: 8/25/2012 Posts: 32
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What are the pros and cons of joint venture in estate development if one gives land (e.g in Athi-River) and the financier build the houses.
-The Land is good for residential houses
-Current price per 50x100 plot is Ksh. 1.5M
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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Pros are there is less headache in dealing with consultants, banks, sales etc. Cons are that there is less profit since you have to share http://www.a4architect.c...ed-communities-in-kenya/As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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I actually wanted to start "this" thread today. @a4architect.com and other wazuans, please advice on products available on this at Housing Finance etal., the interest rates, duration of payment, terms and conditions - design, running of the building, setting and collection of rent etc. etc. If there is anyone who has got into such an arrangement, it would be great to hear your personal experience! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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@maichblack, shelter afrique bank has options for joint venture financing. I have not seen a Housing Finance joint venture project. The Runda paradise project is funded by housing finance on a shelter afrique bank joint venture. http://rundaparadise.kbo.co.ke/ As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Member Joined: 4/4/2007 Posts: 91
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I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale . In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo. My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Knowledge is power , but action gets things done ...
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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Other options such as crowd funding , as being done in the hotel project here, will become common. http://www.a4architect.c...ng-the-southern-bypass/
REITS will also begin to fill the void created by huge bank interest rates to finance. As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: New-farer Joined: 8/25/2012 Posts: 32
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Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Milimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though What would you make/loose (if you go joint way)above selling the plots.Assuming; 1.The plots would cost 2m. each x 2 = 4m 2. How much approximately would be your share in a joint case.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital @the deal, will you be willing for a similar venture in Lamu. We are looking at putting up a logistics park next to the promosed Lamu port, and apartments in a nearby residential area. We are looking for JV.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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PKoli wrote:the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital @the deal, will you be willing for a similar venture in Lamu. We are looking at putting up a logistics park next to the promosed Lamu port, and apartments in a nearby residential area. We are looking for JV. @Pkoli thats an interesting project...my focus at the moment is rental apartments or commercial developments in Nairobi, Kiambu and Kajiado counties...Regards.
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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@the deal,
Thanks, I trust we will get the financier. We have finished the concept.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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PKoli wrote:@the deal,
Thanks, I trust we will get the financier. We have finished the concept. I'm sure you will...I'm allergic to gava dependent projects especially now we are talking of many gava's...look at South Sudan...that M7 is also showing signs of "last kicks of a dictator"
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Rank: Member Joined: 4/4/2007 Posts: 91
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the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital I agree that's a strong upside however it would depends on the terms of the joint venture. The 2 plots are worth 3.5 mil My calculations are that it would cost between approx 3.7m to put up 2 bungalows including drawings, approvals and other associated construction costs . The bungalows are going for 5.5-6m at the moment . 300m from town , 1 km off the road . Potential return is 5m. I would consider a joint venture if it is maisonettes to be constructed Knowledge is power , but action gets things done ...
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Rank: Member Joined: 4/4/2007 Posts: 91
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justKiwi wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Milimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though What would you make/loose (if you go joint way)above selling the plots.Assuming; 1.The plots would cost 2m. each x 2 = 4m 2. How much approximately would be your share in a joint case. The Joint venture I would engage in is one where several people join hands to buy an acre of land and set up 8 stand alone maisonettes . This seems to be working well especially in Kitengela Knowledge is power , but action gets things done ...
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Rank: New-farer Joined: 8/25/2012 Posts: 32
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Pirate wrote:justKiwi wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Milimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though What would you make/loose (if you go joint way)above selling the plots.Assuming; 1.The plots would cost 2m. each x 2 = 4m 2. How much approximately would be your share in a joint case. The Joint venture I would engage in is one where several people join hands to buy an acre of land and set up 8 stand alone maisonettes . This seems to be working well especially in Kitengela What about 1/2 acre enough for four maisonettes?
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Pirate wrote:the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital I agree that's a strong upside however it would depends on the terms of the joint venture. The 2 plots are worth 3.5 mil My calculations are that it would cost between approx 3.7m to put up 2 bungalows including drawings, approvals and other associated construction costs . The bungalows are going for 5.5-6m at the moment . 300m from town , 1 km off the road . Potential return is 5m. I would consider a joint venture if it is maisonettes to be constructed One needs to do a comprehensive feasibility study to determine the best development for the two plots...I dont want to go into details here....but I can already spot errors in your calculations... In case we do a JV your equity investment in the JV will only be the two plots currently valued at Ksh3.5mn (needs to be verified) as you put it...me & my partners will bring in the expertise & the capital... But before that I would need to do a 1. Site visit 2. Feasibility Study i.e Residual Land Valuation 3. Discuss concepts or strategies with you 4. Discuss the returns or benefits of a JV vs doing it alone...the discussion will be backed with financial figures. Then after that I will leave you to make a decision as I decide too.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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@deal, I am thinking joint venture too for a relative. Do you have issues with ancestral land with other developments on the same parcel?
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Lolest! wrote:@deal, I am thinking joint venture too for a relative. Do you have issues with ancestral land with other developments on the same parcel? Ancestral land is always tricky but A. where is the land located? B. what kind of developments are on the erven? On the legal aspect... 1. what kind of title deed is this? is it a Master title? 2. Is your relatives name on the master title? if so is the parcel well subdivided? i.e relative A owns from A to B etc
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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the deal wrote:Pirate wrote:the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital I agree that's a strong upside however it would depends on the terms of the joint venture. The 2 plots are worth 3.5 mil My calculations are that it would cost between approx 3.7m to put up 2 bungalows including drawings, approvals and other associated construction costs . The bungalows are going for 5.5-6m at the moment . 300m from town , 1 km off the road . Potential return is 5m. I would consider a joint venture if it is maisonettes to be constructed One needs to do a comprehensive feasibility study to determine the best development for the two plots...I dont want to go into details here....but I can already spot errors in your calculations... In case we do a JV your equity investment in the JV will only be the two plots currently valued at Ksh3.5mn (needs to be verified) as you put it...me & my partners will bring in the expertise & the capital... But before that I would need to do a 1. Site visit 2. Feasibility Study i.e Residual Land Valuation 3. Discuss concepts or strategies with you 4. Discuss the returns or benefits of a JV vs doing it alone...the discussion will be backed with financial figures. Then after that I will leave you to make a decision as I decide too. Serious business!  Haya, even I have 1/2 an acre a few metres from where KU is said to be putting up a campus... and a few metres from the beach. Current value 3 to 5M depending on whom you talk to.
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Rank: Member Joined: 4/4/2007 Posts: 91
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the deal wrote:Pirate wrote:the deal wrote:Pirate wrote:I'm in the same scenario with 2 adjacent plots at Kitengela Mlimani that I am considering developing 2 bungalows for sale .
In my assessment , joint venture is less profitable however also less involving and shared risk. I however opt to go solo.
My concern is with the gated communities popping up, I tend to think buyers may opt for the former than stand alone units . I stand to be corrected though Hi Pirate...I'm willing to work with you.... Reach me here davismika@contrarianinvestingkenya info so that we can structure something. Regards. Joint ventures are great than going it all alone...apart from the risks associated of doing it all alone...the other partners can bring in the expertise & capital I agree that's a strong upside however it would depends on the terms of the joint venture. The 2 plots are worth 3.5 mil My calculations are that it would cost between approx 3.7m to put up 2 bungalows including drawings, approvals and other associated construction costs . The bungalows are going for 5.5-6m at the moment . 300m from town , 1 km off the road . Potential return is 5m. I would consider a joint venture if it is maisonettes to be constructed One needs to do a comprehensive feasibility study to determine the best development for the two plots...I dont want to go into details here....but I can already spot errors in your calculations... In case we do a JV your equity investment in the JV will only be the two plots currently valued at Ksh3.5mn (needs to be verified) as you put it...me & my partners will bring in the expertise & the capital... But before that I would need to do a 1. Site visit 2. Feasibility Study i.e Residual Land Valuation 3. Discuss concepts or strategies with you 4. Discuss the returns or benefits of a JV vs doing it alone...the discussion will be backed with financial figures. Then after that I will leave you to make a decision as I decide too. Thanks for you comments . As you have mentioned, the concept would determine the financial figures and split thereof. In the current situation, I would be looking to bring the land + partial financing (say 50%) as my equity to the venture Feasibility of the project would be my main concern given the preference of gated community >8 units over stand alone housing Knowledge is power , but action gets things done ...
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