JV Contract and Questions
Hey BP! I was wondering if someone would be will to review a JV contract I just received. The investor is asking me to pay 350$ in earnest money on the contract is this usual? It's also a condo so should I ask to see the assignment contract? Any help would be greatly appreciated!
#1 All Forums Contributor
- Investor
- Virginia
@Kaleb Ashby
Run away. Never pay anything upfront like that. If you do it should go into an escrow company and not directly to someone.
Thanks Chris! What if the 350$ goes into escrow? Should I still ask to see the assignment contract? How do I know if I am truly getting 50%?
#1 All Forums Contributor
- Investor
- Virginia
@Kaleb Ashby
Few questions:
1. Do you know the JV partner? If not have you Done a criminal and background check in them and gotten names of investors they have done business with?
2. What is the deal? This being acquired through a wholesaler?
3. What were the terms of the deal?
Never ever pay anyone anything before seeing any agreements. I thought the money may be for deposit on an offer but rereading it that is not the case.
To me this smells scam.
I Have never met the guy personal, I did a Background check only things I see are 2 SAM Exclusions.
The deal is a 2 Bed 2 Bath, High rise condo, 1400 sqft
ARV: 300k
Asking: 279k
He is a wholesaler, but I have not seen any contract between him and the seller. Other than her name on our Joint Venture Agreement.
He agreed to split all Net Profits 50/50
He seems like a standup Partner. But they all do so appreciate the feed back!
#1 All Forums Contributor
- Investor
- Virginia
@Kaleb Ashby
Asking $279 and arv $300 no money in that deal - you will lose $.
Right, However there is little to no rehab. I was looking to sell it as a rental. According to My JV Partner the Condo Association has no issues with that.
Is there any way I could send you our agreement? See if anything stands out to you.
#1 All Forums Contributor
- Investor
- Virginia
@Kaleb Ashby
I am not an attorney but can take a look.
First rule of investing though is trust but verify. If they say you can rent it, have them show you the docs or ask the hoa.
I still find it nearly impossible for a condo with nearly no equity once you pay closing costs to provide any type of cash flow after paying hoa fees etc
This deal still smells really bad.
I have a call scheduled tonight with my partner.
I’m gonna ask what can be done to the property to increase value?
As Well what are the Association fees?
Is there any other questions you’d recommend I ask or should I just cut my loses?