If those really are comps for your property, in its current condition, then you're getting a great deal.You mentioned the property needs repairs.

My down payment of 5% will be $3,000This leaves $5,000 left over for repair costs, and by reading up on what the FHA guidelines are and what they require for a house to Pass and be approved for " liveable " condition, I will almost certainly need more than $5,000 to do all of the repairs .Can someone shed some light please, as to how strict the FHA guidelines are , and what they will require , that Has to be done .

The "just market value" of their land is then listed at $250K (the county defines JMV as "The price at which a property, if offered for sale in the open market, with a reasonable time for the seller to find a purchaser, would transfer for cash or its equivalent, under prevailing market conditions between parties who have knowledge of the uses to which the property may be put, both seeking to maximize their gains and neither being in a position to take advantage of the exigencies of the other.")I am very interested in learning by participating in this deal but I don't know whether i am getting screwed through 1) him assessing my basis too low by valuing it at 212 instead of 250k and 2) the terms of the overall deal.I am leaning towards doing the JV since there are other places where I can learn about rehabbing and renting, or flipping, but this property offers a great opportunity to participate in a development with a high quality experienced guy who is very well connected. 

.- Properties are in good condition, just a little touch to increase their selling price.Questions ?  

Both are in totally unused condition!

There are many pitfalls to Sub2 deals, they can work in certain situations with motivated sellers and properties in any condition, but you need to understand the consequences of what you agree to.

"There are two primary choices in life: to accept conditions as they exist, or accept the responsibility for changing them."

What terms and conditions should I add to our contact to protect the interest of both parties?

I get pictures and a good idea of the condition of the property.

The other issue is ROI - you'll need quite a bit of plumbing; if you have a lot of galvanzied pipes in poor condition and low pressure you may want to consider pex anyway, at that point you could seperate the systems out.