All Forum Posts by: Ben McMahon

Totally.  I would define the roles and assign a mutually agreeable dollar amount to the Architecture Contract and also the Building Contract.  You can even bring in a couple outside companies to quote them if it helps in the objective nature of things.  

Depending on the need for financing, and willingness of each party, you may be able to get paid along the way through your construction loan, or whatever financing option you use.  Thats probably what I would push for.  Just so you don't get stuck if the deal goes south.  Basically just act as though your architectural firm was a 3rd party and you and the land guy are the owners.  Even though its one in the same.  

When I do a JV project as the General Contractor I include everything that a normal builder would have. Overhead and Profit, General Conditions, whatever is fair to you. You may or may not have to give up any of the backend by doing it this way, but at least you are covered. Remember that the project wouldn't happen if you didnt do it, so you are entitled to the backend as well. Its still Raw land at this point, and he probably doesnt have the knowledge or skill set to do this on his own. If there isn't enough money in the project for both of you to be satisfied at the end, than it probably isn't worth doing at all. At that point you might as well just keep doing what you normally do.

I know these things because I have spent countless hours on projects that seemed like an opportunity because I was a partner.  At the end of the day I would have made more money simply being a contractor to the project.  At least on an hourly basis.  Although there is a value to the education you receive.  So I wouldn't discredit that either.  That has dollar value in my book as well.

Thank you.  I think it worked

So about 2 years ago, I purchased an Old Manor House on 40 gorgeous acres.  Long story short, I ran into issues with the local government when I tried to start an event Center.  The place is unbelievable and perfect for doing this.  The house has Civil War History, and is complete with a carraige house, lake, and unbelievable views of the Blue Ridge Mountains.

Since I attempted the Event Center we got permits to do a winery, thereby going around the county at the state level and are all set to start planting and doing everything we planned on doing in the first place.  Problem is that I have two partners, and the money man is ready to leave.  He wants to sell, and make some money on the deal.  Its complicated, but not really.

The land is also easily sub dividable if someone wanted to make money by selling off the lots.  My investor partners are looking to sell the deal for 1.2M.

Im still interested in being a part of this, since we have had at least 10 events already at the place, and it has the potential to make a ton of money.  I have all the people and contacts to make this work.  Serious inquiries only.

Make him a silent partner, start an LLC. Should be able to have the details spelled out, but make sure you have decision making authority. He can contribute the land as part of the deal. See what sort of returns he might be looking for. You might end up getting a better rate from your land owner partner.

On any JV I usually start with giving the investor his money back first, and than splitting profits. Also if you have contributions you should also get paid back first. The simpler you can make arrangement the better.

If you get into the project and decide not to move forward, you can dissolve the LLC and walk away.

I noticed that most everyone has their signature and website etc when posting.  Why does mine not show up?  Thanks BP

@Gary Miller

Don't know much about Memphis Invest.  Have you thought about going commercial?  I am not talking about REITs either, just finding a sponsor that deals in strictly commercial property.  Its always going to be longer term, and much more hands off.  The benefit of reputable companies renting space allows you to midigate the risk considerably.  Especially because national chains are going to make the property manager do their job.

Other option would be investing in a development project in a growing area.  The developers and often small town municipalities are often looking for capital partners.  In dealing with local governments, I have found they are pretty open to keeping some of their cash and partnering with either local banks or private investors.  I suppose it depends on the local government, but thats the way it is here.  

try @Russell Brazil

@Gregg Hutton 

Getting your license is a great way to get started.  Thats one of the first things I did, and it helped me immensely.  Not only do you get in the deal flow, you get to know how the industry really operates.  I would focus on working with investors instead of regular home owners.  You may open doors to Joint Ventures, Private Lending, and a more inside scoop on off market deals.  Good Luck!

Hey Brian, 

I do a fair bit of house flipping and property management.  Did you end up closing on the property?  Do you still need help finding contractors?

Jake, my guess is that your contractor split when he realized you were wholesaling.  He isn't going to want to waste time bidding on a project that you aren't going to do.  Could be wrong, but that would be my guess.