Joint Venture In Real Estate?
I need to add a little more detailo than I had in my last question. There is a tract of land. The owner is willing to auction it. My company has agreed to pay the auction fees (in excess of $50k) and secure the best auction house for the task. Would it be necessary to form a separate entity to coincide with the joint venture or would a joint venture agreement be sufficient? I’m an investor but no longer hold a realtors license. I want to be able to recoup my investment and profit from the transaction without having to have a realtors license.
I’m a little lost. How do you profit from this transaction? You are paying the cost of auctioning the property and hiring the auction house, are you getting some portion of the sales proceeds for doing so?
Obviously more details to consider as well as local/state laws, but on the face it doesn’t appear that you need either a joint venture entity, a realtor license, or a joint venture agreement. JV’s are usually set up for long-term, go forward endeavors. This appears to be a one-shot event. You are not being paid a fee to sell the real estate (the auctioneer is). A simple “profts-sharing” agreement between you and the seller should be sufficient.