How to Write a Wining JV Proposal

Admin

In the unique world of real estate, transactions are hardly ever commenced and concluded or contracts executed without prior exchange of documents such as offer letters, acceptance of offer or counter offers, expression of interest, proposals, draft agreements etc.

 

These documents are all important as they help shape up transactions from inception until an agreement is reached. However, as far as real estate joint ventures are concerned, proposals are perhaps the major piece of document that determines whether or not a joint venture transaction will sail through.

 

A proposal is a document that is written or put together by the writer for the primary purpose of persuading the recipient/reader to understand and endorse the idea(s) contained in the document.

 

When real estate joint ventures are advertised or listed on various platforms, a host of real estate development companies/private developers tend to show interest in taking up the deal, this is particularly so when such property is located in a prime location. The interested developers, after undertaking the preliminary activities such as contacting the agent in charge of the brokering the joint venture such as JV Pulse and physically inspecting the property, will then have to write and submit a proposal that will be presented to the landowner.

 

Given the number of developers that may be jostling to sign the JV partnership deal with the property owner, one cannot over-emphasize the importance of writing a stand-out proposal. JV proposals are in fact one of the major determining factors that helps the property owner determine who which developer he partners with on the JV.

 

How then do you write a winning joint venture proposal?

 

 

While the endless pile of wuruwuru joint venture proposals usually submitted by clients interested in joint venture transactions may tempt one to believe that writing a good proposal is no easy task, the truth remains that a well written joint venture proposal is not a mystery that only a few can unravel.

 

There are, however, certain critical components that makes a proposal stand out some of which I will be highlighting below.

 

But before then, one aspect very important aspect that many let many down with respect to writing proposals is their presentation. Although there are cases where the party that puts a proposal together is afforded the opportunity to defend their proposal, this is hardly ever the case with real estate joint venture proposals. It thus behooves the writer to ensure that the document perfectly communicates the ideas contained in it as intended even in the writer’s absence.

 

Here’s what I am driving at. Your presentation begins from the choice of paper, you want to use a simple yet attractive letter headed paper that lets any reader know where the document is coming from. Where the proposal is to be submitted electronically, a nearly scanned copy or a copy converted to pdf should be considered.

 

Your proposal should be addressed through the right channel and the subject should also be clear and concise. The language and style of writing should be formal and devoid of ambiguity and unnecessary jargons.

 

Now to the critical components of a JV Proposal.

Introduction

 

The introductory part of a JV proposal should tell the reader/recipient about the writer (the private development company) and highlight their interest in the joint venture partnership.

 

The Offer

 

 

After the introduction, the next step is to state in very clear terms, what the developer intends to bring to the table. Ideally, this part should state in details:

 

1.Exactly what the developer intends to build on the property. If possible, this should be accompanied by the floor plans and/or 3D presentation of the proposed development.

 

2.The estimated project duration.

 

3.The exact benefit the landowner gets, the exact number of buildings, apartments or flats that goes to the landlord should be stated. Where a premium is to be paid, the exact amount to be paid should also be stated.

 

4.The estimated time when the landlord will be due to receive the outlined benefits should also be stated.

 

5.The proposed management structure of the completed building must also be stated.

 

6.The value of the JV property as determined by the developer’s valuer.

 

As earlier said, the peculiarities of the deal will point to the direction in which this could take. A proposal for a BOT structured JV for instance will also have to contain details such as

 

1.The type of development the developer intends to put on the land

 

2.The total number of units that will be available at completion

 

3.The amount of premium that will be paid to the landowner

 

4.The lease tenure

 

5.The number of units the landowner gets to keep at completion

 

6.Who takes responsibility for charges/fees relating to the property?

 

While a proposal is not a legally binding document, it is expected to showcase the developer’s familiarity with the owner’s needs, desires and goals while also addressing as many as possible grey areas that may eventually prove to be a clog in the wheel of the transaction’s progress.

 

The key to winning the landowners heart at this point is to have researched the landowner’s preferences for the jv and tailor your offerings to their preferences, there will be no use writing a proposal if the major highlights of the owner’s preference as advertised in the brief are ones that you cannot or are not willing to meet.

 

Whether the owner’s proposal is open or specifically outlined, the developer, after stating their offer will have to further make a case for how his proposal will benefit the landowner.

 

The Conclusion

 

Having gotten to this stage, the next line of action is to conclude your proposal by convincing the owner that you know what you are talking about and can deliver on your promises. One of the most effective ways of doing this is making reference to your experience in the field and citing similar projects that you are currently working on, or have been successfully executed and completed. Your track record in the field will almost always do the magic.

 

As an alternative or in addition to presenting your track records, you may further include relevant information such as Project Appraisal, Project Cost/Benefit Analysis, drawings and plans etc. all of which will further persuade the owner to trust that you are worth your salt.

 

In summary, a winning jv proposal should have the following key components:

 

1. A presentation style that is clear and devoid of ambiguity

 

2. Offering: It must showcase the developer’s understanding of the owner’s needs and desire, offer clear solutions to the needs and highlight how accepting the proposal can benefit the owner.

 

3. Credibility: It must display the credibility of the developer to make do with his promises.