First time JV advice for a flipper

[Mark Leonard]

I recently met up with an old acquaintance. He has flipped several SFHs and I said we should partner sometime since I'm just beginning. He proposed to me that he's going to buy a house and I contribute $25k of the rehab and he pays me back with interest. He sent me over a contract. Does anyone have any advice for me since this is my first JV to not get screwed? I can email the contract template if anyone's willing to take a look at it.

[Steven Skinner]

@Mark Leonard - Assuming the contract can pass muster, you'll want to find out if your partner is utilizing any other lenders above and beyond what you're contributing. Your position is the only one you should care about, and you want to be first. What exactly is the contract you were sent for this deal? Was it a Promissory Note? Was it a Deed of Trust (which I believe is the appropriate instrument for Utah, rather than a mortgage)? Beyond that, you should be aware of what he's purchasing the property for, how much it needs in repairs and what those repairs are, as well as what it will sell for. Fetch contractor quotes yourself, and be sure to find your own comps. Ensure the property is fully protected with an appropriate insurance policy, probably builder's risk, as well as making sure title insurance is purchased at closing. Verify all of this information. Be aware, acquaintance or not, you might have to get tough if he doesn't hold up his end of the bargain. Know your options, as there are lots of elements to this. Good luck!