JV agreement management fees

[Ryan Kirk]

Is it common to have management fees as an EXPENSE in a joint venture, or is it common for one partner to put up the money, and the other to oversee the management 'for free'? I'm working on JVs that require a big renovation to get the property into rental shape, but after the property is cash-flowing & the renos done...am I expected to just keep managing things myself as my contribution to the deal, or can it be hired out, leaving me to 'manage the manager' and communicate with the money partner?

[Rob Dowsett]

@Ryan Kirk, @Kendra P. is correct, you can design the partnership anyway you want, as long as both parties agree. If you are looking for some selling points for yourself with your JV partner, I read a book by Don Campbell (Real Estate Investment Network) called Real Estate Joint Ventures. It is a good book for learning about the process of JV's (and it is Canadian).  It seems you are well underway, so the section I would direct you to is called "Workshop 6: Choose the Right JV Partner".  This section actually has a list of what each party typically brings to the table.  The list for the Real Estate Expert is almost 3 pages long.  So it may be worth picking up a copy (btw, I have no vested interest in the REIN, although I have read several of Campbell's books).  Even if you don't pick up a copy, you can be sure that you bring much more to the table than most people realize.  I am sure if you take 10 minutes, think about EVERTYTHING you do to put a deal together, and write it down, you would come up with a pretty extensive list that would help any partner to see your value (if they need one over and above the returns mentioned by Kendra earlier.