Understanding JV Agreements From A Legal Perspective


Sarah Larbi: REITE Club nation, I'm Sarah Larbi. I'm here with my wonderful co-host. Alfonso Salemi. Alfonso, it's great to be back doing podcasts. So today's podcast episode is Ryan Carson, and if you guys are interested at home learning about joint ventures and JVs and how to put them together, this is what the episode today is about, and I'll tell you, it's really interesting and if you wanna delegate it out and just hire somebody that knows what they're doing to give you a template for a JV agreement in all the talking points that you need.

Ryan Carson is probably the best lawyer that I know for real estate investors, right? There's lots of real estate lawyers, but investor real estates, law firms are In my opinion, there's not that many in Ontario and there's probably not that many in any, anywhere really in Canada in comparison to the ones that really understand JVs and how to lend money privately, do all those contracts. It is quite complex. So super excited. Hopefully you guys enjoy today's podcast episode. And what do you say, Alfonso? Shall we play the episode?

Alfonso Salemi: Let's do it. Let's get to the podcast. Hey, and welcome back to the podcast, Ryan Carson. Thanks so much for joining again, Sarah and I, and great to have you on.

Ryan Carson: Thanks a lot guys, for having me. It's it's a couple times now as Sarah pointed out, so it's always a pleasure to be on the podcast and talk with you guys about real estate investing.

Alfonso Salemi: Absolutely, you're definitely one of the the REITE club community and the REITE club nation's favorite. And, probably one of the go-to, if not the go-to legal counsel, everything to do with the law around real estate, closing properties, JV, there's all new kinds of stuff. Nuances. Guys. It's so important to have the documents right now. So Ryan is one of the guys that you wanna talk about, but there is some big news for all the realtors that are part of the REITE Club community cause we want to remember.

We have a community of very diverse people, a lot of different avenues and a lot of you guys are professional real estate agents, realtors in Ontario. And Ryan's got some news that he's been telling us about that he's gonna share. So we'll have at it, Ryan.

Ryan Carson: Thanks a lot guys, and thanks for having me. It's very timely. This has been in the works probably for quite some time, and most realtors, especially ones that are quite successful, might have their own teams of other realtors. This has been something they've been probably chomping on to get for quite some time. It's the ability to incorporate.

A regular real estate salesperson, not a broker, but a realtor has not been able to actually do an incorporation until just recently. So October 1st, 2020, the law will officially come into effect to allow for a pre, which is a professional real estate corporation. And this is gonna provide them with lots of different benefits and opportunities.

Ryan Carson: There's succession planning, there's business planning, there's tax planning strategies. There's just many options that this is going to provide for the realtors in the group and even just the realtors just in, in Ontario. So it's a great opportunity for the realtors to seek out from their tax advisors, tax accountants and lawyers and get opinions on whether it's worth them doing it again. I would suggest if the realtor is somewhat successful or wildly successful, it's a no-brainer. It's almost a given that you'd want to take this up and have this opportunity to incorporate.

Sarah Larbi: All right, awesome. Now you said Ontario. Is this Canada, Ontario? Like how wide does this span?

Ryan Carson: For Ontario.

Sarah Larbi: Okay. So for Ontario units now realtors out there that do well have the ability to incorporate, which, like you mentioned, brings the tax advantages. So I think that probably is the big thing, right? There are tax advantages in addition to a few other things.

Ryan Carson: The tax planning and the potential tax savings are obviously the easy, exciting, tension grabbing details of it, but it goes beyond that. There's so much like its options. Quite honestly, it's just an option. If you don't incorporate, you really have, you have very little option.

You can't get creative with your tax planning, your succession planning, your business planning, your business operation. Whereas if you are incorporated, there's so many layers of options that you can build on from the, whether it's just you just wanna save tax, whether that's, tax now in your operational years, or tax on potential sale of your business, or tax in your eventual passing, to your family legacy planning.

Tax is definitely the flashy, attractive bit of why you'd want to incorporate, but there are other aspects too. So there's state planning, you can do primary and now corporate wills, which will save you on probate administration tax when you pass away. You could build in different levels of share ownership for potential licensees. So those would be other agents, that might be working on your team. But you could also build in.

There's still some gray area that we're still trying to figure out the details on, but like a lot of other professionals, like doctors, dentists, where you can have a professional corporation, but you can have non-licensed members, so family members hold shares as well.

They can't be voting shares of the corporation, but you can still do tax planning in your family that way as well. That's a bit of a gray area. We're still trying to figure out and see what the law's gonna settle on there. Those are again, Options that are available if you incorporate, if you don't incorporate, then you have no options.

Sarah Larbi: Are there any downsides to it? Like it sounds like a lot of great things. Other than the corp taxes will cost more in general, but what are the downsides?

Alfonso Salemi: The downside is that you are going to have some maintenance costs increase. You're not gonna go to h and r block and file your tax return for 200 bucks. You know you're gonna have probably at least a thousand dollars in a tax return. But keep in mind that what a well-versed tax accountant and consultant will be able to provide you in savings will far outweigh you paying them an extra 800 bucks a year.

You will have some. Annual minute filings, with your lawyer, might be two to 300 bucks a year for that. But again what you would save is gonna far outweigh the maintenance cost. That, at least if you have the right advisors, that's what you should find. You should find there to be extreme value, which pays off in the first. Year, maybe even, first year or two for sure.

Alfonso Salemi: Absolutely. We always talk about, obviously all the trusted partners yourself, obviously included right at the top of that list, Ryan of having those trusted partners, lawyers, realtors, mortgage brokers. Accountants, right? Inspectors, all that type of stuff where they're looking out for your best interest.

Yes, there is a cost associated with incorporating, with transactions of closing legal estate, but you want to have the best so that you are paying those fees, that's an investment along with the actual investment of the real estate versus paying a fee or a cost, right? And I think that was one of the tough things that a lot of people and myself included, wrapped my head around, oh, it's gonna cost a thousand dollars a year to do taxes, but really, That a thousand dollars is gonna open up maybe some other savings. Again, like you said, even future planning. Yeah, really good news. And the realtors are listening to this and part of the right clip community. Yeah.

You gotta get in touch with Ryan and he's the guy to go through. So I know one of the hot questions, one of the topics that we always talk about is JVs right?

Sarah and I always go back and for the last couple years Sarah's been. Accumulating her portfolio primarily, with herself, her spouse, and not using JV. She had her income. I was always telling her like, every weekend it felt like we were bringing on another joint venture partner.
We're coming to you, Ryan whoa, my god, I'm scared. Like maybe someone the first time using a JV partner or myself going, ah, don't worry, it's, we have to put something. What do you do? How do you protect yourself? Is there one JV contract? Probably not, but are there few things that you can share and maybe, I don't know, Sarah, anything additional?

Sarah Larbi: I feel like that was a lot of questions all at once, but feel free to answer Alfonso's questions and I have lots of questions for you after.

Ryan Carson: I think as we alluded to in our prelude to this podcast, probably other than doing the real estate transaction for the right club members, actually closing the purchase for the sale for them. Two other most common things we do is potentially incorporate a structure. And or JVs. Over 50% of the work we do for the REITE club members typically is JV agreements.

Whether it's reviewing or drafting from scratch, the JV document, Alfonso mentioned, is there just like one set, JV agreement to use? No. But that being said, there are gonna be common elements and clauses, in any JV agreement worth using. A lot of times people will just go straight to the points, this is how much I'm gonna put in. You're gonna do this. I'm gonna do that. If we need more money, this is how we're gonna do that.
If we don't like each other, then this is how we're gonna do that. And then, what are the milestones for us, either putting in more money, taking money out, and or selling or refinancing the investment. I just rhymed off a bunch there, but that's, those are basically like the key points.

That we would be looking for or building out in our JV agreement, so we because we've been doing it for a bunch of years now with the real estate investors and the REITE club members. We have probably two or three, maybe four JVs for given situations that we like to use. One or two for sure are go-to and we will feel out the client and what they're looking for.

Some guys want to really. Legalese type one, they want to be like 25 pages and really just be intimidating because that's what their style is and that's what they're looking for. So we are kind, we have one that's like that. And then we have one that I would say still covers the majority of all those important points in that bigger one, but is a bit more plain language compressed. It might be like five to eight pages. And then it gives the opportunity to put in some schedules to it that could extend it, 10 to 15 pages depending on how many times you're gonna use it for how many different projects.

Sarah Larbi: That second one sounds more like the agreement. I would like not too crazy legalese info, but it is easy to understand. So let's take, just take a step back cause you did name a lot of things in there that you put in there. But, so one of the things that now as you mentioned October 1st is when you know people are gonna be incorporating for realtors. I'm actually retiring on October 1st, so I am gonna be looking at JVs at that point in time.

I don't want too many, I still wanna be very picky. Just as important as they pick me, it's important that I work with 'em cuz it's a five to seven plus year relationship in a way And there's probably a lot of people that are, Alfonso's a pro with JVs, I'm going to now be doing it too. With that said, what are some really important conversations and topics to have before we get to you? There's obviously discussions that have to be had, had conversations about, some of those things that you actually listed off, but what are taking a step back, good things for JVs to talk about before they put ink to paper.

Ryan Carson: Have to have, whether you make it more of a formal or informal conversation between you and your other partners, y you've gotta have that discussion about, okay, who are all the parties gonna be? Like? Is it just the two of us? Is there a third? Is there a fourth? Like, how many of us are there? How long is this for? What's the term of this JV gonna be? And then who's doing what role in the JV? And what's the purpose of the JV? Are we doing a BRRRR? Are we doing, are we gonna do four projects that make up this JV two BRRRRs and RTO and conversion what are we doing right?

Within what are we doing? You have to say, okay, JV one is doing these roles and responsibilities. JV two's doing these ones, JV three's, doing these ones and so forth. So really just coming together. Again, it's depending on your style, sitting down and having a formal or informal discussion about all of those things we just talked about.

Then the further points to that would be, Okay, now that we know the projects, the scope, who's doing what, what are some of the key milestones, who's putting what into the project? Is it blood, sweat, and hard work for JV one? And that's what gets them their payout. And for JV two, it's, Hey, you gotta put down the hundred grand we need for the deposit and down payment and be on the mortgage.

That's it for you? Or is it a bit of a mix? What are the inputs? Key milestones. I mentioned that there are, is it a four or five year project as you alluded to? And so each year, are there gonna be key milestones? Are there gonna be interim payouts back to the partners throughout the course of the JV because it's doing so well each year, as annual income return? Or is it all just at the very end? Are there monthly milestones?

Then what's the final projected or possible range of rate of return? Everybody wants to know, as best you can, what that might look like. And the last one, which is typically the most uncomfortable one to talk about, and it's probably the one that's usually glossed over or forgotten about, cause everybody's pumped about doing a real estate deal. They don't, and you're in love with each other because you're obviously working together and you're pumped.

You don't think we're, we can't possibly disagree. We can't possibly not like each other in a year's time. And have three years to go. So the discussion needs to be had of like, how would you go through a divorce? Like, how would you split from each other and make one another whole, or however you want to call it.

How do you terminate the JV and you want to try to do that? Doing two things. Preserving as much of your positive reputation as possible. Cuz even though there's, it's a big world out there, it's a small community, we're gonna travel fast if Alfonso's not a good guy to deal with, which is not true of course, but you wanna keep your reputation even in a difficult situation, positive.

Then number two, you want to do it as quickly and as cost effectively as possible, right? Mediation, arbitration, going to court, those are not quick, easy and cheap. If you have covid, they're not even possible, right? They don't, you can't even do those things during a covid type of environment. So having some sort of divorce mechanism or a discussion head is pretty important, I think.

Alfonso Salemi: Ryan? I'm not sure if it was on a previous podcast or at the live events, or. I know even it might have been Chad from your office as well too, that, so you know what? They shouldn't be called agreements. They should be called disagreements because that's the only time that you look at them is when there is a disagreement, right? Because when things are going well and the cash flow's coming in, no one's gonna be like, oh wait, my agreement said you're only supposed to gimme 500 cash flow. You gave me six.

Oh wait. It's when those negative things happen and it's impossible to predict. Every possible outcome and have that written out. And like you said, that might be 500 pages and not even nobody had a global pandemic in any of their agreements. I am almost sure of that. Maybe you can speak to that but it's having that, I think the two conversations that I wanna unpack with that you said was really having the conversation whether you are.

The active partner, the money partner or combination, is understanding what the goals are for each person, right? And then the agreement pretty much puts that into place, right? Because if two people really want to be passive no one's gonna be doing anything. And if both people are gonna be active, then there's gonna be always a disagreement on who's gonna be doing what and, okay, no, I'm doing this and stepping over each other's toes.

I think those are the things that have to be clearly laid out. And then, yeah, like I love what you said is some type of mechanism that, okay, we don't agree, okay, we're going this way here to avoid arbitration, courts, all that kind of stuff. And then putting that out there. So again when you're, is there something that you like. Has to be like a certain timeline that, other, some investors want to prefer or or typically, or is it really up to the agreement, up to the type of strategy that the investor that's looking for the JV partner is planning?

Ryan Carson: I don't think there's anything set in stone or any, like automatic go-to timeframe or timeline. I like your point that you made about a disagreement that probably was chatty's clever, like that. It is really a disagreement rather than agreement, but also, understanding each other and your goals. Of what you wanna accomplish out of a project and how you want your roles and responsibilities within that project to work are crucial.

As you said, if you've got two people that really just want to be passive it's gonna be probably hard to make that project work as effectively as if you had a passive and active partner like true, active and passive partners. A hundred percent, that's crucial to To determine upfront.
I think the sooner you can have this conversation with each other and start, banging out the informal, like to, to Sarah's point, Hey, I'm gonna be retired and now really deep into all this stuff. She was already deep, but now she's getting really deep.

You wanna have these kinds of conversations as early on. So number one, you can feel out whether or not you feel like you got a good fit with somebody. And it's okay if you don't have a good fit, trust your gut. Some, that's your best mechanism. Sometimes just be like, you know what?

I don't know. I just, something's not right. It's not anything against the person. It's just not, it just doesn't feel right. I gotta look again. I gotta look elsewhere, right? But then if you just, if you feel like, oh yeah, this is great, everything feels amazing about this whole scenario. You start having those, that conversation about all the turns, over coffee or a beer or whatever.

Start writing down all your informal items and points, and then, one of you gets your lawyer to draft it up, right? And then. Def. This is crucial. Get them, if you draft it up, get them to have their lawyer review it. If they're not willing to spend a couple hundred bucks for their lawyer to review it, that tells you something right there.

Sarah Larbi: Absolutely. You definitely want the lawyer, the other person's lawyer to review. Okay, so now as you're talking through this, there's two ways in my mind. Maybe I'm wrong, maybe there's more, but there's two ways that this plays out, right? So there's many times where I'm talking to somebody and I would JV with them, they would JV with me. That's great. I don't have a deal, right? So I don't have a deal, but I like them. So that's scenario number one. So do I get a letter of intent or not? And then scenario number two is I've got a deal, but maybe I don't have a JV for that. Then I go out and JV.

Is there a letter of intent for the ones that you're? Thinking of working with, but you don't necessarily have a deal with yet. And then, how do you proceed when you have a deal under contract? For that piece, I guess there's no, is there a letter of intent for that?

Ryan Carson: Your first example where you've got somebody that you've got great, a great vibe with and you're like, I definitely want to do a project with this person. And likewise they are you, but you just haven't found that project or opportunity yet. Yeah, you could put together a non-binding letter of intent.

Letters of intent are by their nature only, an expression of your wishes towards each other. It's, they're not typically legally binding, right? If it makes people feel more comfortable and you know that you've got a basis to build off, to go spend time hunting for the opportunity, then absolutely you can do that LOI, but make it a condition of the LOI. By a certain date to have either found the opportunity, extend the LOI term if you haven't found the opportunity. But if you do find the opportunity that you have to enter into a jV by such a date.
In the other example where y you've got the opportunity, but y you haven't, got anything in place yet.

Ryan Carson: That is the other example.

Sarah Larbi: I guess that's where probably all of Alfonso, you're doing both, right? So you're bringing in JVs, but I'm guessing you're like, as you get the deals and you're like, okay, this is a great deal, and then you shop out the JV essentially, right? To figure out who's interested in it. So I guess that's a little bit of a different scenario versus finding the JV and talking to JV and figuring it out and having that conversation prior.

Alfonso Salemi: Absolutely. When working with investors. And I love the idea of the letter of intent you've used as well too. But again, it's, you're gonna know the timeframe and what the intentions are of the investors as well too, if they're looking to place.

An investment in 30, 40, 60 days, something like that. And there's no opportunity, right? Even if you sign that letter intended, they want to go find something quicker. Ryan said, it's not binding. But yeah, if we do have a project and now we don't have that investor, and I'm gonna, touch wood and knock on my head that every time we've been able to close on a project because we've had that investor.

It's tough because of the weather. I think that goes to talking about getting the contract or sorry, getting the property under contract. If you have conditions or now how do you close? That's now if you're not able to do that. I always like to make sure that if we're going out and searching, I have somebody to pair it up with.

That someone's ready to close on that property. It's really the timing of the oath, but there's nothing that's gonna hold an investor if it's been six months and they told me six months ago that they were interested. That I can't expect them to not go and find another opportunity to go and invest or to lose them.

I guess that's like signing a buyer rep agreement, right? We're talking to realtors out there. If you have that buyer rep agreement, but there's no action going back and forth, like how enforceable, maybe that's actually a question I was, I thought about, I jotted down here.
Let's just say we were in that joint venture agreement and the worst case scenario happens and we didn't really plan it out or there's nothing. STR in the contract, how does that go about? Is it just negotiating back and forth what the project is? Again, like you said, you have to have that balance, but how is that taken care of or determined if there is?

Ryan Carson: You're saying you, you've got a JV agreement, but something has come up and there's no terms about it.

Alfonso Salemi: That's right. One of the parties didn't fulfill their obligations or what's listed out on what we try to carefully put together, how do, how is that actually enforceable? What do you do if that's the case?

Alfonso Salemi: If their agreement silent on, how something would be handled. You gotta hope. That you're gonna be very quickly able to come to a meeting of the minds between, discussion of the parties. But, if you weren't, and you got into a loggerhead and there's a lot of friction and tension there.

That's when you know failing there being some mechanism to like, to divorce from each other. That's when you, that's when you get stuck and you compromise on their point of view. Because you don't want this to go?

Get outta hand and be crazy and be reputation damaging, or you dig your heels right in, on both sides and you end up, sitting in a courtroom or mediation or arbitration or something. That's why, I've heard different real estate investors especially heard some that are quite successful too. Say, they've never done a JV ever, they do a handshake deal or they write it down on a napkin or something like that.

Ryan Carson: I would say they're either one of two things wildly successful at the art of a business deal, or they are lucky. So you have to pick or choose which one you think they are. But the bottom line is like you're rolling the dice, you're rolling the dice and the agreement will at least give you, hopefully, certainty of charts, right? It's for the disagreement, right? It's not really for the agreement stuff.

Everybody's gonna be happy as a pig and poo it. This thing as is, as accepted. As Alfonso says, it's gonna be right or even more if you have a great return, nobody's gonna be upset about that. It's only gonna be if it underperforms or you just don't start liking each other or being able to work with each other. You're gonna really be like, oh, I really wish we had something. Or I really wish we spent more time getting our lawyer to put provisions in the agreement to deal with this.

Sarah Larbi: Absolutely. So Ryan, what happens though, do you register the JV agreement? What happens to the JV agreement once both parties have signed it? What do you do with it or what do you recommend?

Ryan Carson: Because JV agreements have essentially an inherent trust provision in them, because you're inevitably saying, one party's gonna be registered, the title and hold title in trust for the beneficial ownership of all the other parties in the JV.

The Land Registry Office in Ontario does not allow the registration of any sort of document, either called the trust agreement or that has any implication of a trust in it. So they'll actually review them if you tried to register them, and then they would just. Delete them. So you can't really register JVs in the Land titles registry office anymore in ontario.

I don't know about other provinces. You might be more successful in other provinces, but for the Ontario registry office, the director of titles will not allow. So they really have a bit of an honor system for the party that isn't on title to like to do their own due diligence and. Lease the process.
The thing I've found most common is the non-registered. Partner is typically the one actively working the deal. So normally the person on title with the more they don't even, they've never even seen the property in their life. Like they don't have any concept of where it's located, what it's doing, who lives there.

Like they're not typically very hands on. They're like, here's the money. Yeah, I'll sign for the mortgage and just make sure, everything goes really well and at the end of the day, we'll all get paid and we'll all be happy. That's typically their Involvement in it, in the ones that we're seeing on an average basis.

It's the gut person who's not on title that typically is managing it, dealing with the trades, if it's a reno flip, that sort of thing. Or a BRRRR or dealing with the rent, own tenant, buyers. They're they set up everything, they just don't happen to be the person. Registered to title.

Sarah Larbi: Could the property be sold and the person that's doing all the work technically have it sold from under them?

Ryan Carson: Theoretically it's possible because again, there's nothing on title that would prevent the registered owner from pulling a little bit of a 180 and trying to sell it. But again, I would say in most cases, the non-registered person who has a beneficial ownership in it, because of the j jv they're the active managing partner. So they would probably miss something going on. I would think, if something was getting sold or what, they, and they can certainly ask a lawyer, whether it's the one that did the registration in the first place or their own independent one.

Ryan Carson: If there was a perceived conflict for that lawyer, they could say, Hey, can you do a title search? I feel like something weird's going on here. I feel like they might have refinanced the property without me knowing about it or something. The other thing that you could do too, if you were really worried that, hey, I know, I feel like we're falling apart or this isn't a good partnership anymore, or I feel like they're, this person's, maybe gonna try to stab me in the back.

If you feel like they're gonna try to do something, you could go to a litigator and get certain things registered against the title. So you could get like a certificate of pending litigation registered against things you could do to freeze it up for a period of time so that even if they did in engage and try to sell it or refinance it, if you had that, they call it a C P L a certificate of pending litigation registered against it, it would trigger the immediate. Stop that action because nobody's gonna buy it with a litigation proceeding.

Alfonso Salemi: This is really important to talk about in these worst case scenarios. Like a great question, Sarah, cuz we operate the same way at Jag is that we are the operating partner. We're not on title, but we're again, checking in with the clients, and a provision actually that we put in all of our JV agreements is for the investor, but really it's for us as well too, as like a reporting mechanism, right?

That we are reporting the client's wellbeing. Throughout their tracking to get on to, to qualify for the rental and the actual property as well too. So for the investors out there that are worried if the active partner is actually doing what they're saying, right? If we're, like, we're talking about burs from Sara side, progress reports the same way that you'd have your trades report to you.

I wanna put some perspective around it, is you do a lot of business out of your office, Ryan, and on how many proceedings, let's say, getting into these worst case scenarios, is it I don't know if you could put a rough percentage, I'm not gonna ask you to put an exact amount, but how often out of 10 times are you looking at something like this that gets to the worst case?

Ryan Carson: I don't even know if it would be one in 10.

Sarah Larbi: About 5% to 10% overall.

Ryan Carson: Yes, in every 10, it might only be like one in every 20 or 30 or 40 that actually go like the full distance of this is a complete another meltdown. So either, again, my clients are either really lucky or they have good agreements put together or maybe a bit of both. Or, as you, I think have always alluded to in some of the other podcasts here, do your due diligence, like check. Check it out, check, make sure this person is somebody that you wanna work with. Just like you interview and screen prospective tenants.

You're screening each other, is this gonna work? The person might be a great person, but you might just, you might be great friends, but you can't, colleagues maybe. And that, and those are okay. REITE Club Nation not to give another excuse or reason not to invest because, oh, I'm not sure about the agreement and worrying about all those things.

Yes, you have to put those proper things in place. Maybe, talk to Ryan, talk to other people that are partnering, that have partnered with others. Referrals are a great way. People that have actually worked with those people, seeing their schedules, seeing how that's all gone out. Track record is a huge thing, right?

Making sure that you have that. And yeah, if it is like you, we said here, like the 5% chance, guys, I bet you're gonna learn something from that too. And the next agreement that you put forth, you might have another provision that's like a must have. So don't let that stop you. The listen. We've done tons of joint venture partners.

I know The REITE club. It's full of JVs and I love that Ryan just thinks so many of them are doing those deals. That means we actually are growing together and doing more deals. So that's a great thing. And just having the right things in place and that gut feeling. I know it sounds so hokey pokey, but really having the one-on-one video calls, getting that stuff, that due diligence your gut's gonna tell you what to do. Just the paperwork is gonna back you up with me.

Sarah Larbi: Absolutely, and I will say templates. It sounds like Ryan's got templates. So Carson Law, if you need the long form template or the shorter form template, reach out to Ryan and Ryan, I'm guessing those are for sales for investors in Ontario.

Ryan Carson: Yes we'll talk to people. We'll get an understanding of what their particular terms are, and then we'll put it in, but we'll do the first one for them, and if they want to use it thereafter, then I guess they can.

Alfonso Salemi: Ryan, since you've been on the podcast so often, we don't want to do the same normal lightning round questions. I'm gonna propose to my amazing coach, Sarah, that we come up with some new original lightning round questions. I'll start. With the first one to give Sarah a couple seconds to think of a good question, but yeah.

We're gonna do four questions. We always do a lightning round. I know things change, but I guess one quick question I had for you was or the first question of the lighting round. What are you currently reading? What's a good book that you're reading right now?

Ryan Carson: I have read several times who is one of the legendary Notre Dame fighting Irish football coaches. And it's basically his autobiography and each chapter, he writes it as if it's based on a story that he dealt with his players, but then he brings all the life lessons out of it.
From that football moment. So I like it because it ties in sports but then, before you know it, he's hitting you over the head with a brilliant lesson.

That's again he's very motivational. He does a lot of motivational speaking events and stuff now in his retirement.
One of those guys that speaks to you as if he's a brilliant scholar. Like you just read it in plain language, simple story, but, and then all of a sudden he just hits you in the face with this such a simple statement. But it's just a profound lesson to have. So Lou Holtz is awesome.

Sarah Larbi: Very cool. Awesome. All right, Ryan question number two. The border is, now, let's just say they, they reopen. What's the first place you wanna travel to When things resume to somewhat normal and you don't have to quarantine everywhere you go?

Ryan Carson: Alfonso knows I like the beach, probably some hot destination in the dead of winter. Overwater hut or something like that. It doesn't really matter where. But don't wear hot and quiet clothes. I don't really like the big resorts or anything like that, I don't, I'd rather just be my own island or something like that. But there is a hot beach, beautiful water reef. That would be, that'd be great.

Alfonso Salemi: Love it. And arms length away from a nice cool adult beverage, right?

Ryan Carson: Maybe not that far.

Alfonso Salemi: I love it. Alright third question of the lighting round. What's a new hobby, if any, that maybe you've picked up during the pandemic or during the last six, seven months now, during this whole covid, anything new that you've tried for the first time or never thought of or that you're so bored of.

Ryan Carson: I wouldn't, going back to my last thing about, hot tropical destination. If I could retire and never have to worry about money ever again. I'd love to be a surfer. That's something I would love to learn to do. I'd never cut my hair. Trim the beard. It would just be just a surfer guy, right? But obviously I haven't been serving here in Burlington, Ontario. But something I have committed to which Covid is allowed for since we've been cooped up and everything is working out.

I've got a home gym and we really added to it just before covid hit, thankfully. I've had a renewed commitment over the last six months to really try to get into shape. So that's been something that's been good. Instead of gaining 50 pounds, hopefully I'm trying to get a little bit more muscle shape in there.

Alfonso Salemi: That's awesome. You won a strategic thinker as a lawyer and the guy that wants to go on the beach is getting the Beachbody. Ready in the basement, right?

Ryan Carson: Home trying.

Alfonso Salemi: Very strategic. Love it.

Sarah Larbi: You know what, if we get locked down again, at least you can work out. We tried. So we have a treadmill on order and it's been like two months. I don't know what's going on with it, but hopefully we don't get locked back into our homes before I get on the treadmill. But, it's good planning. All right. So on your Facebook, you've got lots of great drinks. I think my favorite I've seen so far was the Caesars that you make. If you had to pick an alcoholic drink that you would drink every day, if you could, what would that be?

Ryan Carson: You hit the nail on the head. Caesars for sure. You can have 'em for breakfast, lunch, or dinner, and you can garnish 'em up and make 'em a meal all on their own. But because I'm an avid cigar fan now. I do enjoy a Scotch and cigar or rums are always a go-to drink for me. So rum and cola, those would probably be my main drinks. You can never go wrong with an ice beer either on a hot summer day, but Caesars are the best.

Alfonso Salemi: Love it. Ryan, thank you so much for joining us again and being such an amazing partner to the Wright Club and to the REITE Club community. You're such a valued member. Any for those of the REITE Club that haven't heard of you or want to get ahold of you, how can they get in touch with you?

Ryan Carson: They can visit our website, which is triple www.carsonlaw.ca. And that'll have all our information there. It'll have the team of lawyers and some key staff people. All my contact details are there. Email cell phone. Feel free to gimme a call. Email's the best way to reach me though. But yeah, the website will have everything. And feel free to follow us. We've got all the social feeds too, and they're trying to get me to do more cool things like Alfonso's limo tours and, what do you call it, Alfonso? It's edutainment?

Alfonso Salemi: Edutainment. I love it.

Ryan Carson: I'm trying, man. I just don't have the pizazz like you. So I'll get there.

Alfonso Salemi: I can picture you with a three-piece suit sitting there and the nice in the office with a scotch and cigar. Talking all about JVs, incorporating and how to build yourself to wealth. So definitely check out Ryan on all the social platforms.

Sarah Larbi: Ryan, thank you so much for being on the show. Thank you for all your insights. And guys, if you need JV agreements, recheck Carson Law. Ryan Carson. Thanks so much.

Ryan Carson: Thank you.

Alfonso Salemi: What a great chat with Ryan. Such a wealth of knowledge we got into, really got into it about the joint venture contracts and especially for those investors out there looking to grow their portfolio. Either, retiring soon or, not relying on their income anymore and wanting to look and partnering with people to qualify for mortgages and deals. Great chat with Ryan. What were your takeaways? I know you were excited about this combo and talking about JVs as you're looking to expand the business. So what were some of the takeaways that you liked? Sarah.

Sarah Larbi: I think just like good, like aha moments is that the contract itself is not registered on title. So just to keep that in mind, you definitely wanna trust your joint venture partners as much as possible and really understand and have those discussions prior to all the contingencies and all of the, what ifs and what if this happens and the good and the bad, right?

There's a lot of great things that we talk about, but there's also some downsides and it's just important to have those conversations ahead of time and to use a good lawyer to draft up your agreement of what you guys have discussed. Maybe use the template that Ryan's got and just make it as tight as possible.

Hopefully you guys don't have, Issues down the road. And Alfonso, you've got 170 properties, you were saying at the beginning of this, and you've got JVs and you're doing it well, and everyone seems to, work itself out or I don't know, like what you, if you've had issues or not, but doing well.

Alfonso Salemi: I'd be lying and saying if there weren't any issues, but we've always, Have that clear understanding of what each partner is responsible for, and then the mechanisms, Ryan says that when there is an impasse or say a project doesn't go according to plan. Okay, what are the conversations?

Everybody wants to walk away with the most amount of money. There can't just be one winner. Everybody has to walk away. A little bit happy and a little bit sad that they didn't get everything they wanted, but they didn't lose everything either. When the projects do not go according to plan or in some cases, luckily in a rent to own situation, if a project or essentially a client isn't successful, then you know the project.

Can still be sold and still make profit in some cases more. That's not the first goal. And that's a lot of the conversation. Most of what I'm doing these days is having conversations with potential investors, people that are looking to place their money, getting it working harder than in a mutual fund, an RSP or something like that.

There is always that apprehension that oh, you're out to get me. Why do you need my money? It's when you're in the Shark Tank or Dragons then it's allowing people to run and operate their business a little bit more. And obviously capital money, mortgages is just a piece of the pie. It really is.

It's clearly defined having those conversations. You talk about all the time, whether it's about hiring your account, your lawyer, your realtor, your mortgage broker, your inspector, all the different right partners that you have and those power team members do your due diligence. Are they investors themselves? Are they thinking right? And really take a look at what your goals are. And if it's not an alignment, move on. There's lots of opportunity out there.

Sarah Larbi: The other thing is you could still do those businesses without a joint venture, right? You could still do it by borrowing private money, even if you don't have money. There's still other ways around it, and there's definitely lots of different strategies. So it's not always the answer to JV however, for some people it is in order to scale faster.

For some people it is, right? So there's definitely pros and there's cons to joint ventures. You could talk to somebody that's got a ton of joint ventures and they may just say, if I could do it again, I would maybe change a little bit, right? So I'm not gonna say which investors said this, but there's an investor and he's got tons and tons of JV deals and he's if I could do it again, I probably would've narrowed it down to a handful of JVs and tried to do as much of it myself and see a little bit slower and that's okay, right?

Then there's some other people that are like, you know what, it's worked really well for me and this is why I am here. Today, here in this spot, and it's from the JVs. So I would just say look at the pros and look at the cons. Every single strategy is gonna make sense in some amount of time for some people, and it might not for others.

Alfonso Salemi: That's right. And, look out to that vision, right? Like Sarah, like you said, it was seven years that you get in retirement. If you said I want to do it in one year, if I wanna do it in three and really ha or five and have those goals and reverse backwards. And look and things change along the way too.

I remember. No, there's people in the REITE club. Oh, I want a hundred doors. Why a hundred? Or, I think it was the number. He was like it needs to be 10 and then I can retire. You have to figure out what that is and those are gonna change as well too. Quality of life and, where, what you, how you want to be living it and what it allows you to do.

Sarah Larbi: Alfonso, I think we continue this conversation online @thereiteclub.com in the forums. That'd be really cool. Let's try to loop it around and guys, these podcasts are awesome, but we wanna have that community feel. You guys come on thereiteclub.com. Ask questions about JVs.

Ryan Carson's on there as well. He can answer some questions, check out the forums. I think that's, just a great way to get additional questions. If you guys are listening to this and you're like what about this? What about that? Say I wish they would've asked this. These are great questions that you can ask on the forums.

Alfonso Salemi: I know Sarah and I are there daily and we're checking out what's going on. This is our way to keep in touch with our REITE club community and see what's going on. We're talking to you. We want to hear from you guys, right? That's the place to be. Thereiteclub.com. Have your voice heard, share your thoughts, share your opinions, and let us know what you want more of. I don't know, Sarah, what do we say? Till next time.

Sarah Larbi: Come grow with us.