Joint venture set up
I want to approach a land owner with a proposal to build industrial condos on his land. In return we will give him a % of the buildings once leased up that is equal to the cost of his land based on a set cap rate. What should I keep in mind before I present this deal? 


[{"id": "efwf3t7", "text": "Have you done land development deals before? ", "replies": [{"id": "efwh6p2", "text": "Yes, on land I owned outright. \n\nI have briefed the owner and confirmed interest. \n\nWe have the funds to purchase outright but I see this as a way to acquire land at a discounted rate by doing what we are good at, building and leasing.  \n", "replies": [{"id": "efwhv8a", "text": "Essentially it's a contingency contract until you get your approvals and then I would think you would structure it as an equity waterfall. You're the general partner and he's the partner. His contribution is fair market value of the land. He gets preferred returns on his investment and then you'd set up a distribution structure from there. Lots of these deals have a promote if the project does very very well. This seems a lot more complicated than the structure I think you're proposing but you need to incentive him to do the deal. Approvals and construction take a very long time. If you want this guy to sit there and be patient on this then you need to show that he could see significant returns. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "efxyejy", "text": "The lender will want his land as collateral unless you have a lot of equity.  \n\nAlso you say they get a percentage at lease up... Offer them a 50/50 deal if they want to put in money first for more credibility", "replies": [], "depth": 1}]