Newbie Joint Venture Story / Feedback Appreciated 😉

[Cristina Rodriguez]

 
Hello BiggerPockets Community,

I am new to the real estate industry and I just want to share my first joint venture experience in the hopes that you will share yours, your direction and feedback.

I met my prospective JV partner at a Real Estate event in Los Angeles. He and his partner are just getting back in to the industry, collectively have 30-years experience, and are doing Joint Ventures (fix and flips). They offered 66% for using my cash and credit and his team would be doing all the work and overseeing the entire project. He and his partner graciously answered all my questions, so I felt at ease.

The two deals that we discussed came fast. They provided the purchase price, ARV and investment amount, but I had to ask for pictures, comps, JV agreement (JVA), etc.

The first deal - fell through before we got to signing a Purchase Agreement (PA) and or JVA.

The second deal - came on the same day that I was told that we lost the first deal to another buyer. Again, I asked for pictures, comps, and the JVA with the terms and conditions that I requested for the first deal. I was presented pictures, no comps, no JVA, and I was told that I needed to do the PA first, then Earnest Money Deposit (EMD), then LLC, then JVA, then the loan, close escrow and then we start the work. I called the company that we were buying from and found out that the PA is final if I sign. As a result, I did not feel comfortable signing a PA, since it was final and I had not received comps or signed a JVA.

Although we did not get to the loan portion of the transaction, we did speak with a hard money lender. They were charging $10,0000 + 2%.

I'd love to hear from the community if this is normal percentages, procedures and if the loan fees are average, low or too high? Any feedback is appreciated.

Kindly,

Cristina