Lender · Los Angeles, CA · Member since 2015 · 278 posts · 78 votes
11y
@Jimmy Cantave Our company joint ventures with fix and flippers. We put up 100% of purchase and rehab. The rehabber pays for closing costs, points, and interest. Under certain circumstances, we can roll them into the loan. At the end, we split profits 50/50.
Consultant · Dana Point, CA · Member since 2015 · 48 posts · 7 votes
11y
A joint venture is essentially a one time partnership deal. From what I've read, it can be structured to be taxed as a partnership or a corporation, each structure having different benefits and pitfalls. I'd think getting a rock solid agreement in place would be very important for these deals, so talk to your local RE attorney and CPA for more info.
Evan is correct, it's essentially 'one time partnership', whether it's for tax reasons or each party brings something to the deal (one guy has $, one girl does management) it's an agreement between parties for a specific purpose. I'm sure some much more knowledgeable people will chime in with more details..
Investor · Haverhill, MA · Member since 2015 · 761 posts · 328 votes
11y
as others have said, its a one-time deal between folk(s) to get it done. Usually in Real Estate, each sides brings one of these: money, property, skills, manpower, connections, knowledge. What you need to decide among all parties is what each will bring and what is their percentage of payoff (this is usually the tough part).
Lender · Los Angeles, CA · Member since 2015 · 278 posts · 78 votes
11y
@Jimmy Cantave Our company joint ventures with fix and flippers. We put up 100% of purchase and rehab. The rehabber pays for closing costs, points, and interest. Under certain circumstances, we can roll them into the loan. At the end, we split profits 50/50.
Commercial Real Estate Broker · Denver, CO · Member since 2015 · 38 posts · 8 votes
10y
@Manuel Angeles, can you tell us more about the relationship building between your company and the flippers? For example, are these relationships built in the creditworthiness of the borrower, the analysis of the flip, etc.? Is the flipper expected to make a payment every month if the flip takes 60+ days, like a traditional mortgage?
Lender · Los Angeles, CA · Member since 2015 · 278 posts · 78 votes
10y
@Matt Dorsten The main factor in our JVs is the experience of the Rehabber and the deal spread. They are expected to make interest-only payments for the duration of the project
@Mark Higgins We usually have a 3rd trust deed that we put on the property that signifies "Shared Appreciation Mortgage," usually the 50/50 of net profit, or 6% of gross sales price. Message me I can send you more info on how we structure our deals,
@Jimmy Cantave Our company joint ventures with fix and flippers. We put up 100% of purchase and rehab. The rehabber pays for closing costs, points, and interest. Under certain circumstances, we can roll them into the loan. At the end, we split profits 50/50.
@Manuel Angeles Thank you for the information. I'll be reaching out to learn more about your company