How exactly are JV deals done in wholesaling?

[Mahmoud Y. Elhalawany]

Hey there everyone! My partner and I were recently approached by a virtual wholesaler who came to us with a deal. we have never done a JV deal before. These people are out of state and completely virtual. I would feel comfortable if there was some sort of contract between us and them BEFORE, we blast it out to our cash buyers. Of course having never done one of these before we do not know the proper parlance with these things. is it common to just blast out the deal to our buyers and say something like "We do not yet have this under contract, it is a joint venture deal, call/email us for more details" and then put it under contract with this other wholesaler? or should we have a contractual agreement with them before we blast it out. I would feel far more comfortable having some sort of contractual agreement first, but if this is not how things are done then I understand. What do you guys do?

Thanks so much for taking the time to read my post!   

[Lydia R.]

@Mahmoud Y. Elhalawany The best way to protect yourselves is to do a couple things. 1. Get a copy of their contract to make sure that they are actually under contract with the seller. 2. Agree in advance and in writing what the wholesale fee split will be. 3. Also agree and understand (in writing) exactly what your role in the transaction is. Do they expect you to go and take pictures of the property? Meet contractors to get repair estimates? Etc. 4. Sign an assignment with them for the amount they want to make, ex: say property under contract for 100k and they were charging a 20k wholesale fee. If split is 50/50 then sign an assignment agreement with them for 110k and then send deal to your buyers at 120k. Also agree in writing in advance how to split any overage (ex: if you accept an offer of 125k) and have that in a second doc that you submit to the title company so everyone gets a check with the correct amount.