When a JV partner wants double-close costs off the top instead of off his own split
A useful case for anyone structuring a JV wholesale deal. Contract signed on a 3/1 brick ranch in a working class pocket, 1,100 square feet, out-of-state seller wanting out, purchase price 142k. The dispo partner has a buyer verbally at 168k, a 26k spread. The dispo partner insists on a double close rather than an assignment because the end buyer has seen assignment fees before and would balk at a 26k line on the settlement statement. That preference has a real cost: transactional funding at 1.5 percent of the A to B leg plus a 495 doc fee, roughly 2,625, plus extra title work on the second settlement running about 1,900 in that county, a total of 4,525 of friction that exists only because of the double close. The dispo partner's draft agreement takes all closing costs off the gross before splitting 50/50, which nets 21,475 split, 10,737 each. The finder's position is that the double close is the dispo partner's preference and his buyer's comfort, so that cost should come out of the dispo partner's share instead, netting 13,000 to the finder and 8,475 to the dispo partner. The dispo partner's counter is that the deal does not exist without his buyer, so the cost is a deal cost, not a personal cost. The general principle that resolves cases like this: whoever's requirement creates the extra cost typically absorbs it, unless the JV agreement was written up front to treat all closing costs as shared deal costs regardless of whose counterparty required them. Settling that principle before the contract is signed, not after, is what prevents this exact argument from repeating on the next deal with the same partner.
