The Joint Venture Calculator (JV Calculator) is a software program that does the number crunching for your ‘full’ vendor finance Joint Venture transactions, i.e. a transaction where your JV partner buys the property, you sell the property with vendor finance and you have a profit sharing arrangement.
The JV Calculator can handle all the following complexities:
- What Loan Value Ratio is your JV partner buying at & how does this Ratio effect profitability
- Is your JV partner’s loan Interest Only or Principal & Interest
- Is your JV partner going to purchase with a Vendor Pays Costs Offer
- Are you going to pay interest on your JV partner’s Contribution?
- How to calculate your JV partner’s total Contribution
- How do the overall ‘numbers’ change with various on-sell prices
- What effect does a smaller or larger buyer Deposit have on profitability
- What would be the effect of a sliding scale, on-sell interest rate
- Maybe you want to share the Deposit, the Monthly Cash Flow and Backend Profit other than 50/50. Just enter what you’ve agreed or see the effect of varying the percentages.
All these factors affect the transaction’s profitability and with the JV Calculator you can see the result of these ‘what ifs’ in seconds. Just click the ‘Start to Calculate’ button.
The JV Calculator is very user friendly. Simply tell it your buying ‘numbers’, your selling ‘numbers’ and your profit split and it’ll give you and your JV partner the critical results you need to know, such as:
- The total dollar return at the end of years 1 through 5
- Your JV partner’s total required Contribution
- Your JV partner’s total percentage return, calculated at the end of years 1 through 5
- Your JV partner’s total annualised percentage return, calculated at the end of years 1 through 5. This is the percentage a term deposit would have to give to match your return.
One of the best parts of the JV Calculator is the ability to change different variables and see exactly how it affects your transaction.