partnership in wholetailing

[Mijin Kim]

Hi all! Hope everyone on BP is off to a great start of 2019!

I am a beginning real estate investor in NY and was recently contacted by an NYC wholesaler proposing to work on a joint venture "wholetail" deal in Bushwick, Brooklyn. I would love to get some feedback and tips from those of you out there with experiences in partnership in order for me to assess the viability of this project. FYI, I met this potential partner in a NY City REIA meeting a few weeks ago and heard her pitch one of her wholesale deals (so I don't know her too well yet, except that she seems to be known by others. I am rather new in the business and this REIA group)

Here are the details (as much as I have been given so far verbally. I have yet to see all of these in written).

What:

1) 3 story, appx 2200 sqft apartment building built in late 1880's, all boarded up needing a major gut rehab (# of bed/bath are unknown)

2) lot right next to the above building (don't have the measure yet but it's small, appx. 0.2 acre or possible under )

Purchase Prices, ARVs, and asking prices (provided by the potential partner):

Potential partner got both of them as is off of a private auction at below prices:

1) building: auction purchase 700k; ARV of 1.3M; asking to sell at 900k

2) lot : auction purchase 300k; ARV of up to 1M; asking to sell at 300k

Proposed Partnership:

She is funding 90% of the deal through her private lender so she needs to put down $100k of her own cash and she is asking me to put down $50k with profit split of 25:75.

My concerns:

- She has not provided me with the rehab estimates but based on what I see in person from outside of the properties, I think its going to be a major gut rehab so I am assuming at least 300k. Being a new investor I am not really savvy at all with rehab estimates, bug I am concerned she's asking too much for the wholetail fee. In general, is this a good deal? FYI, Bushwick, Brooklyn NY is a very active rental market with increasing diversity of population ethnically and socioeconomically.

- I have not done any real estate deal on my own, nor have I been a part of RE partnership. How can I protect myself I were to proceed with this joint venture deal (trusting the partner's integrity, exit strategies, etc.)

I would very much appreciate any input/comments you might have!!

Thanks so much!