A real estate investor who has enough cash for the down payment and the experience to manage an investment may not be able to get a loan on a property due to poor credit. This investor might seek out a joint venture with an individual or entity with the credit needed to get financing on the property.
A well-connected real estate professional may have a relationship with a quality tenant who needs a build-to-suit lease but lacks the means to make it happen. This presents an opportunity for a joint venture with an investor or developer who can provide the building to the tenant.
Joint ventures allow multiple people, or businesses, to combine their resources to complete a deal. Each party involved may lack the experience, expertise, or capital that the other has. They're able to get deals done by working together toward goals they wouldn't be able to achieve otherwise. It often makes sense to give up some equity in an investment if it will allow you to get the deal done and grow your real estate portfolio.
Joint ventures also have a benefit over partnerships because each party continues to operate under their own legal entity. This can limit each entity's involvement to the specific project they're working on together.
Of course, there's not one perfect way to develop or invest in real estate. It's always necessary to weigh the pros and cons of each strategy as it relates to the deal.
Some developers and investors have a hard time working with other people. Some people like to be in control of every situation while others have a hard time making decisions.