b'Chapter 6Joint Ventures or Securities: Whats the Difference? What if you are selling joint ventures? Are you still selling securities? If you are using other peoples money for your real estate investments, you need to know the difference between a joint venture and a security. The questions you need to ask are: 1.Will investors invest money in a common venture with you? 2.Do your investors have an expectation of profits based solely on your efforts, skills or experience? If the answer to both of these questions is yes, then you are selling securities and you must comply with securities laws. Conversely, if the answer to the second question is no, then it may be a joint venture. This requires that your investors are actively involved in managing the project along with you.If you have determined you are selling joint ventures, you are not home-free, as joint ventures still require a Joint Venture Agreement, and a clear and written understanding of who will perform what tasks, and how each joint venture partner will be compensated.Additionally, joint ventures have some drawbacks for both you and your investors. 31'