Joint Venture

[Luke Texidor]

Hey BP,

I am looking at a possible deal in Los Angeles county that would be more beneficial to both the seller and I if we joint venture. The house will not be able to be financed conventionally due to the condition of the property. The sellers only options would be to sell the property all cash to an investor at a discount due to the condition of the property or fix it herself. The house will need a considerable amount of remedial work and money to get it up to code standards.

My proposition would be to put up the money to fix the property to code standards and rehab it to get top dollar on the market. The seller would be simply providing the property. After sale we would split the profits left over from the 75% LTV and cost of construction. We basically would be splitting the remaining 25% minus the realtor and closing costs.

My question is how to structure the contract. Would the seller still hold the insurance? How would I be protected in a deal like this? The seller is still not sure what they want to do, but I would like to be prepared. I am sure there is someone out there that has done a similar deal or an attorney to give some insight. Any help would be much appreciated.