The other thing that they missed was they didn't miss it, but the house has like this radiant heat that comes out of the ceiling or something. Totally not desirable at all. So the house has a wood stove, and they were going to take that out, and put in a gas insert. Where this property is located out in the country, I flipped houses in this area before people love wood stoves. They love wood stoves. So I'm like don't take out the wood stove, like don't even go through the cost of that. Just leave it there, don't replace the gas, just leave the wood stove.
So, if someone can bring me a deal, I'll join venture all day long, but I want them to kind of like get me involved sooner than later. So, what happened in a deal that was presented to me is the buyer is a newbie. They went under contract on other deals in the past. I forget how many might have been 2, 3, I don't know. They do like it seems like sort of a home inspection when I'm gathering from email, and then they back out of the contract because something comes up on the inspection. So then what happened is they got this deal under contract. But they didn't have the money to close. So someone referred them to me, because they were in my local market, and I was like I have the money to buy this deal, but they were already in contract. And there were some things that I was pointing out with this property that they either didn't know, or they weren't fully disclosing to me.
Hey, today I'm gonna talk to you about some lessons for people who are new to Real Estate Joint Venture. You probably should have done this before you ask to joint venture, or this is the way the joint venture should have been structured. So I'm going to talk about some real life lessons, and give you real life examples. More importantly, because if you're anything like me, you learn from things actually happening, not from textbook or like video. I need like real life examples. So, that's what I'm gonna give you today.
The other thing that they didn't tell me, or maybe didn't notice. As the property has a shared driveway, which is very common when you're like out there in the boonies. But, it like shares a driveway with a neighbor which might not seem like a big deal. But when an end buyer, when you flip that house goes to get a mortgage, the mortgage company is going to ask if there is an easement on the deed. Meaning you're allowed to go up that driveway to your house, if the neighbor owns the driveway, and is there some kind of like shared driveway agreement. Meaning who's plowing the driveway, who's maintaining the driveway. So the mortgage company for the end buyer is gonna wanna see those things, because they don't want their being like driveway squabbles, and then it ends up you own this house, and of this mortgage on it. But you gotta go park way down the lane on the freaking busy road or something. So those things have to be in place.
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Aug 20, 2021So, you might say agreement subject to 14 day contractor bid contingency. This means you have 14 days after you go under contract to walk a contractor through to double-check your repair estimates. And this is when you can take your joint venture partner through, or start talking to them before you make the actual offer. So you can start looking for joint venture partners, and you can also start finding deals. But be doing both simultaneously, like start creating those relationships. If someone's new in my market, and they came to me and said; hey, if I could bring you deals, would you joint venture? Yeah, like nothing is more important than the deal, that's the bread and butter, the money is super easy. But the deals are the really hard part lately.
And I know everyone likes to drop their opinions below about prices of septic systems. I'm not out there digging up, putting my own septic system. I've had several septic systems put in. We've purchased multiple properties where the septic has failed. We've got multiple septic quotes. Furthermore, we do anything from like five thousand dollar repairs, all the way up to the highest one we've done is a thirty-six thousand dollars system, because it was a house on a tiny lot. Not only that, but we had to put in this certain Elgin system, and the township wanted some certain kind of thing. It can get expensive, so it had a subject system.
So I'm going to give you some examples of what I'm talking about. So, let me just double-check my notes here. So, we can teach you what to look for when we walk through a property with you. So if you have a JV partner, and you have a contractor big contingency period. It gives us time to walk through, like what kind of things would we point out to you that you might not think are a big deal. So with this property, number one, it has a septic system. We always buy houses, as is no inspections unless the property has a septic system.
So I emailed them back, and said, hey, I noticed it has a septic system. Did you have the subject insist system inspected? And they messaged me back, and said; no, the septic systems good. So I messaged them, and said; okay, the septic system is good. My initial question still stands, did you inspect the septic system to which, they replied no. But the seller said the septic system is good. I can't tell you the number of times the seller has told me. We have the septic system pumped all the time. The septic systems great. And then the septic system fails. So, a seller telling you the septic system is good, it doesn't mean anything at all.
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Sep 06, 2021So, lesson number one, if you're new to real estate joint venturing, the earlier you get your joint venture partner involved in the project the better. So, what do I mean by that, I don't want you a lot of times newbies are worried about, or at least should be worried about. I don't want to waste a more experienced investor time. So, how do I not waste their time?, that's a great question. So you should learn how to find deals, and you should learn how to analyze deals. So that you know that you're actually bringing that investor a deal. You can actually even go as far as getting the deal under contract, but I would put in your contract what we call a contractor bid contingency period. This gives you time to walk a contractor through.
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