Joint Venture - Seller Contributes House / I Contribute Reno $

[Sean Pincus]

Does anyone have an experience putting together a joint venture on a flip with the existing homeowner... please read scenario below:

1. Seller has a property they want to sell for $175,000 but no money to complete renovations.
2. Investor (Me) has the funds to complete the renovation, which would be approximately $50,000. I do have the funds, but do not want to buy the house at $175,000 and put an additional $50,000 into it.
3. After Repair Value on the house would be $325,000+
4. How do you structure the JV for the seller to contribute the house 'value' of $175,000 (or less), and I contribute the renovation costs at $50,000?

- How do I assure my profits? (do I take title, assume mortgage?)
- How do we split proceeds? (if any split at all)
- Is there a better way to arrange this so I can limit my cash outflow?

Thanks!

[Account Closed]

Give the seller a $10K downpayment and have them carry back $165K for 6 months at a mutually agreeable interest rate.  If the seller has a mortgage, take the property subject to the mortgage for 6 months, and have them carry back the balance.  This way, they get their asking price and you get a loan with decent terms.  Additionally, you own the property during rehab. Skip any joint venture agreement or any equity sharing unless the seller won't work with you any other way.