Updated almost 6 years ago on . Most recent reply
Joint Venture Going Wrong
I hope you are all well during the Covid Crisis.
I have a question about a joint venture that is going wrong.
In October of 2019 a wholesaler contact of mine brought me this deal. It is a Condo near downtown Calgary. My joint venture partner got this property under an agreement for sale with a 24 month maturity. The seller was in arrears on her taxes and agreed to sell us the condo for $275,000 if we paid off her back taxes of $5000, plus a deposit of $10,000. The resale on the condo was around $360,000 at the time. So this seemed like a no brainer. The original strategy was rent to own.
I provided the money up front to get us into the deal, as well as the first months payment to the seller and my JV partner was going to cover the rest of the monthly expenses (roughly $2000/month). He was the working partner and was in charge of getting the unit rented or sold.
As the month went on, nothing was getting done. No renter, no listing the property. I started wondering what he was doing. I had several calls and meetings with him regarding the property, and he always told me it was taken care of. He was using other investor capital to cover holding costs and was paying the seller every month. Communication has been an issue from day 1.
Yesterday I got a Facebook message through my business page from the seller telling me that he hasn’t paid her a dime since November of 2019. Which means he hasn’t paid her at all. He currently owes her $9180.
My question is, what can I do to get him out of this deal and cover the rest myself? He is the one on the agreement for sale along with my business, but he is on title(or so he says) and has Power of Attorney for the property. Is there a way that I can pay the seller what is owed and take over everything?
Any advice would be appreciated.