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.

In addition, prices are based upon a market which is always moving, imperfect (prices are not always in line with value), and has other factors not considered (such as distressed conditions of the property or the owner).

If the property is in a condition that prohibits getting bank financing, then your only other real option is private/hard money.