Joint Venture with Rehabbing Company

[Aodhan Ridenour]

Hello all,

My partner and I own a contracting company and have completed two full rehabs ourselves in the past year. We communicate regularly with investors who are looking for us to give them quotes on full rehabs. While consistent business is appealing, we are more interested in the prospect of a joint venture where one party provides the funding (equity partner) and our company (project management) handles the entire rehab start to finish. The way I understand it our company and the equity partner would split profits after the closing 50/50. 

Have any of you ever attempted this process or know anything about how it could be set up legally? 

Any responses or advice would be greatly appreciated. Thanks a million!

[Don Harris]

@Aodhan Ridenour I do it all the time as a PML. Builder brings the deal, I fund the purchase closing whereby a promissory note and mortgage are executed with my LLC as mortgagee. Subsequent construction draws are funded based on evidence of progress.

Builder sells house and we both get paid at closing. 

We create a letter of intent (LOI) prior to the transaction that lays out in plain English what both sides of the transaction have agreed to. Very simple but precise. Trust but document.