Module 6: Advanced Strategies

Joint Ventures (JV)

Partner with other investors to leverage capital, expertise, and resources on bigger deals

What is a Joint Venture (JV)?

A joint venture is a partnership between two or more parties who combine resources, skills, or capital to complete a real estate deal. Each partner contributes something valuable and shares in the profits based on agreed terms.

JVs allow you to do bigger deals than you could alone - one partner brings money, another brings deal flow or expertise.

Common JV Structures

Money Partner + Deal Finder

Most common structure in wholesaling and flipping:

  • Partner A (You): Finds deals, negotiates, manages transaction
  • Partner B (Money Partner): Provides earnest money, funding, or capital to close
  • Profit Split: 50/50 common, or 40/60 depending on effort and capital invested

Wholesaler + Wholesaler

Two wholesalers team up on a deal:

  • Partner A: Controls contract with seller
  • Partner B: Has strong buyer list or specific buyer lined up
  • Profit Split: Divide assignment fee 50/50 or based on contribution (e.g., 60/40)

Investor + Contractor/Flipper

For flip or rehab projects:

  • Partner A: Provides funding for purchase and rehab
  • Partner B: Manages construction, oversees rehab, lists property
  • Profit Split: After all costs, profits split (often 50/50 or investor gets return first, then split remaining)

How to Structure a JV Agreement

Essential Elements of Every JV Agreement:

Roles & Responsibilities

Clearly define what each partner does. Who finds deals? Who funds? Who manages? Who communicates with buyers/sellers?

Profit Split

Exact percentage or dollar amount each partner receives. Common: 50/50, 60/40, or tiered (investor gets X% return first, then split remaining).

Capital Contributions

How much money each partner puts in. Who pays earnest money? Closing costs? Holding costs? Rehab budget?

Decision-Making Authority

Who makes final decisions? Offer price, repair scope, listing price? Set thresholds (e.g., both must agree on offers over $10K in repairs).

Exit Strategy

What's the plan? Wholesale and split fee? Flip and split profit? Hold as rental and split cash flow? Timeline expectations?

Default & Dispute Resolution

What happens if partner doesn't fulfill responsibilities? How are disagreements resolved? Mediation? Buyout clause?

Ownership Structure

Who takes title? LLC? Individual names? Entity ownership? This affects taxes and liability.

Example JV Deal

Wholesaling JV Structure:

Partner A (You): Find distressed property, negotiate contract at $120K

Partner B (Money Partner): Provides $5K earnest money, covers $500 in marketing costs

The Deal: You find cash buyer at $140K, wholesale fee = $20K

Profit Split:

Gross Profit: $20,000

Marketing Costs: -$500

Net Profit: $19,500

Partner A (You): $9,750 (50%)

Partner B: $9,750 (50%)

Earnest money ($5K) returned to Partner B at closing before split

Benefits of JVs

  • • Do bigger deals than you could alone
  • • Split risk with partner
  • • Learn from experienced partners
  • • Access to capital or buyer lists
  • • Scale faster with leverage

JV Risks

  • • Partner doesn't fulfill obligations
  • • Disagreements on strategy or decisions
  • • Profit split disputes
  • • Miscommunication or unclear roles
  • • Legal liability if not properly structured

Always Get It in Writing

Never do a JV on a handshake. Even with friends or family, always have a written JV agreement signed by all parties.

Work with a real estate attorney to draft a proper joint venture agreement that covers all scenarios. The $500-$1000 for legal is worth avoiding $50K+ disputes later.

What is a Joint Venture?

A joint venture is a partnership where two or more parties combine resources, skills, or capital to complete a specific deal. Each contributes value and shares profits based on agreed terms. JVs let you do bigger deals, split risk, and leverage partner strengths.

Common JV Profit Splits

50/50 Split

50% / 50%

Equal partners with equal contribution of work, risk, or capital. Most common for balanced partnerships.

Money Partner

60% / 40%

60% to money partner (provides capital), 40% to operator (finds deal, manages project).

Wholesaler JV

70% / 30%

70% to funding partner, 30% to wholesaler who brings the deal. Lower for less work involved.

JV Agreement Must-Haves

Clear Profit Split: Define exact percentages and when profits are distributed
Roles & Responsibilities: Who does what? Who finds deals, manages contractors, handles paperwork?
Capital Contributions: How much each partner invests and when
Exit Strategy: When and how do you sell? Flip, hold, assign?
Loss Handling: What if deal loses money? Who covers losses and in what proportion?
Dispute Resolution: How do you handle disagreements? Mediation, arbitration, or buyout clause?

Always Use Written Agreements

Never do JVs on a handshake. Even with friends or family, get it in writing. Have a real estate attorney draft a JV agreement that covers all terms, contributions, splits, and exit scenarios.

Verbal agreements lead to lawsuits. Protect yourself and your partners with proper documentation.