Newbie Equity Investing

4 Replies

Originally posted by @Christian Wilson :

I have an opportunity to get in on a fix & flip opportunity. What’s the best contract mechanism to cover yourself in the event legal action is necessary?

I'm assuming you mean the contract between you and the other partners. If so, use a Joint Venture Agreement.  

@Jim Pellerin thank you very much. I’m currently in a situation where a borrower may not fulfill our agreement and could potentially lose my investment. I want to be a little more cautious in the future. Have you dealt with anything like this before? If so, how did you deal with it?

Originally posted by @Christian Wilson :

@Jim Pellerin thank you very much. I’m currently in a situation where a borrower may not fulfill our agreement and could potentially lose my investment. I want to be a little more cautious in the future. Have you dealt with anything like this before? If so, how did you deal with it?

You should have had a promissory note in place with the borrower and you could have it registered on title.  

@Jim Pellerin Thanks again. I do have a promissory note, but it is not registered on the title. I assuming that’s something that takes place at closing? Or can it be done afterwards?

We didn’t partner the deal, but he brought brought me in due to needing capital. I do know there are some tax benefits if he is unable to pay, but I have substantial proof i.e. bankruptcy or other documented means. I’ll have to do my due diligence in recouping my investment, but do not want this same mistake.

Does the Venture Partnership Agreement work like a promissory note? I have to do some research.

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