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Joint Ventures in Estate Master - Which one?

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With Estate Masters many Finance Options and Preferences; there are a multitude of ways to configure a Joint venture. But whenever setting up a Joint venture in Estate Master, the first question we need to ask is ‘What kind of Joint Venture is it?’. Is it:

•    Between a Land Owner and Developer?
•    Between Two or more Developers?

Both types of Joint Venture can be easily set up in Estate Master; but each are intrinsically different and require a different setup.

1. Between a Land Owner and Developer

Estate Master has its own built in functionality for setting up a Joint Venture between a Land Owner and Developer.

By activating the Joint Venture functionality in the DF Preferences; you open up the ability to enter a Land Owners land value, and cells in the Input Sheet for the Land Owner to contribute a percentage of any cost or collect any percentage of a revenue.



In addition, a separate abbreviated Land Owner Cash Flow is featured at the bottom of the Cash Flow Sheet. This can track, month by month, the Land Owners costs and revenues; also considering the Land Value that has been contributed to the project.



But most importantly; the Joint Ventures returns are analysed on an additional section at the bottom of the Summary Sheet called Summary of Investment Returns to Land Owner & Developer. This allows you to compare the costs, returns and key KPI’s for the Developer, Land Owner and the entire Joint Venture side by side.

This provides a quick, accurate and totally transparent view of how your Joint Venture with a Land Owner will affect all parties involved.

2. Between two Developers

A Joint Venture between two developers is a different prospect in many different ways; and therefore it is best to set up the project as a Single Entity.

As there is no Land Value involved in this type of Joint Venture; any additional developer is much better served as an additional loan to the project; although there are often many different facets to any Joint Venture, any investor in a project is effectively loaning money to the Joint Venture itself. If viewed along those lines, configuring a two Developer Joint venture is quite easy.



The flexibility of the Estate Master Loan Facilities allows you to decide when and how money goes to and from the Joint Venture Partner, and also allows you to apply a profit split to the Partner at project end.

And at the bottom of the Summary Sheet; you can look at the Returns On Funds Invested for details on your Joint Venture partners Peak Exposure to the project, and the profit share returned. 



Every Joint Venture project will be different, and each will have its own specific demands or traits. If you are an Annual Maintenance Subscriber, and you require assistance or advice in setting up your project, please do not hesitate to contact the Estate Master Support Desk to help you set up your Joint Venture. The Support Desk had many years’ experience in assisting Estate Master users, and are yet to come across a project we cannot assist with.

For more information on Joint Ventures or an overview of the settings and inputs available to model multiple sources of debt and equity funding for projects in Estate Master DF (Development Feasibility) and DM (Development Management) please join us for a live Q&A with Alex Moffat, Director of Advisory Services at 11am, Tuesday 25th March. Register now

Date Published: 19 Mar 2014
Category: Hints and Tips

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