Investor Partner is out of FUNDS!! Solution/Advice Needed

[David Le]

A few months ago I JV'd w/ an investor on a couple of properties. We closed under their business and we have a signed JV agreement. I put the down payment on both properties. At the time I did not have an LLC set up which the hard money lender required which is why we closed under their business. The agreement between us is that i cover the down payment and they handle the renovation and make the monthly interest payments. Upon sale we would split profits 50/50. Now my partners advised me they are out of funds and cannot cover payment on either property this month. Both properties are fully renovated and on the market already

I'm looking for the best exit strategy where i can recoup my investment, so this is what i came up with so far:

opt 1- BUY OUT. i suggested i pay off the principal balance on both properties using traditional financing. Ownership will go solely to me. this alleviates them of the monthly payments and puts the liability on me. i'm figuring this would be a nominal loss/profit or breakeven due to closing cost, but at the very least I would avoid the hard money lender from foreclosing and having to go to courts to prove my stake in the property with the money I initially put down

opt 2- WHOLESALING the deal. this would still be a buyout only i would go under contract and assign this to another investor to take over. my assignment fee would be what my down payment was on each property so this would be pretty much a break even. going this route i can avoid having to pay out of pocket for closing cost since the end buyer/investor would pay that. 

note: i'm the listing agent on one of the property and another broker is listing the other property at 1% commission, with both paying 3% to the buyers agent

looking for feedback or creative ways to minimize my risk. if there is any possible way for a profit would love to hear that as well!