JV with seller? fix their place then sell it?

Question

Rather than buy property, can I create an agreement to foot the rehab, and sell it (im licensed) and split profits equal with seller?

anyone done that and how structured with attorney?

seller owes 60k.

ARV 175k.

Rehab 25k

Simon Collins · Answer

You can make an agreement say whatever you like :)

Simon Collins · Answer

I don’t see why you couldn’t?

It’s just another Simple JV where one person is contributing the house and one person contributing the cash (rehab funds). The liability (mortgage) is where it gets tricky but it doesn’t have to be complicated.

You just need to value the home in its current state (fmv) that is their capital contribution to the JV. If they will continue to guarantee the mortgage and it not be assumed by the “partnership” then this is how things would work.

Say the home currently is worth $80k

They owe $60k

Their Capital contribution is $20k 44.4%

Your capital contribution is $25k 55.6%(or however much you spend on the rehab)

JV with seller? fix their place then sell it?

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