A guide to creating a joint venture consortium

Marketing

Next comes the question of how to fill the places you have available within the consortium. You have a number of options here. You can combine with others or market it yourself. There are restrictions on how and where the cash goes until the consortium is constituted. 

Most will choose to make the opportunities available through a larger packager, Self Build LLC. The reason for this is that they have web sites and marketing arranged to do this and offering a wide range of opportunities of their own and on behalf of other packagers, they are more likely to meet the needs of a person looking to take up an opportunity than a packager is on their own. Marketing a wide range of opportunities they also can spread the marketing costs and go in for a wider range of approaches, using presentations and introductory commissions. 

If on the other hand you wish to promote some or all the places yourself you can do so, and you may have already come across people while developing the consortium package that wished to become involved or may see a means of advertising and promoting the package you have on offer directly to a particular group of people. You will then need to produce your own marketing material, advertise and follow up each of those interested. You must however remember that you as the packager are not allowed to take part or retain any interest or part of it.

In practice you may be better advised to do this in co-operation with Self Build, even if you do your own advertising and convert some of the sales, as you will also find some people who are not interested in your package but may be in others and there will be less pressure put on you to make concessions to sign up each participant, which under the rules you are not allowed to do.

Marketing the opportunities yourself as the packager may open up possibilities of conflict later, as they may misunderstand the role you are playing when marketing and they may feel you have promised them more than you have.

Marketed through Self Build you can still get introductory rewards of up to £1000 on each person you introduce, if you qualify, see the section on the exchange website www.property-club.org to see details on this.

Whichever route is chosen, the moneys received have to be paid to an approved stake holder, who will distribute the funds to the relevant parties, as agreed as soon as the consortium is formed. At this time the only approved stake holder is Maximum Coverage Ltd. Clearly as some funds are being transferred around and some banking charges are being incurred there is a charge for undertaking this that has to be factored in, although included within the marketing cost of the project. If doing this in conjunction with Self Build they will pay these costs. 

In most projects £5,000 per participant is considered as evaporated funds, of this £2k is used up in paying the registration of the partnership place and 2 years membership for the participant with Property Club International, £1k to Self Build LLC to participate in the joint marketing and cover their costs, including providing an initial chairman for the first two meetings, transfer costs and more, £1k to cover either advertising or introductory commissions, and £1k in specific marketing costs for the consortium and in sales commission to the consultant who signs up and visits to confirm all is as it should be. In practice you can leave this entirely to Self Build to deal with.

The main doorway site and exchange site for Property Club International is at www.property-club.org  
You may also like to visit www.property-club-international.org, it  contains a series
  of articles on joint venture consortiums and the organization behind them.