JV partner wants transactional funding costs off the top, I want them off his half

Your math is fine but you're pricing the wrong thing. The 4,525 isn't the cost of his preference, it's the cost of not having a second buyer. If you had three buyers you'd assign at 168 and dare him to complain.

Also check your 1,900 title number. Double close settlement fees in my area are quoted per file and the second file usually picks up a full owner's policy premium unless the underwriter will do a short term rate on the resale. That can swing a thousand either way, and it varies by state and by underwriter. Get the title company to put both settlement statements in writing as estimates before you sign anything with him. Otherwise you're arguing over a number that isn't real yet.

Who holds the EMD question is the one I'd want answered before the split question. You posted 2,500. If the buyer walks after you've burned the inspection period, is that 2,500 a deal cost that comes off the gross of the next deal, or is it just gone from your pocket? His draft probably says nothing about it. Mine didn't the first time either.

Slightly basic question and I'd rather ask it here than guess. Why does a buyer care that you made 26k? If they're buying at a price that works for them, what's the actual harm in seeing the number? I understand the feeling, I just don't understand the mechanics of why it kills deals, and quarry is spending 4,525 to avoid it, which is real money.

Pull the draft up and look for four things before you argue about percentages.

One, whose name is on the purchase contract and does the JV agreement give him any right to it. If the agreement lets him step into your contract on your default, you've handed him the deal.

Two, non-circumvent. Does it cover his buyer and your seller, both directions, and for how long. If he keeps that buyer relationship exclusive and the deal dies, he calls your seller in 60 days.

Three, what happens on a dead deal. Who eats the EMD, who eats the funding commitment fee if it's non-refundable once drawn.

Four, whether the split is defined on gross or net and whether "costs" is a defined term. If it just says closing costs, he can put his own wire fees and a courier charge in there and you'll be annoyed for 300 dollars.

The 4,525 fight is worth about 2,262 to you. The contract control clause is worth 26,000. Spend your goodwill on the second one. And whether a JV like this touches your state's licensing rules is a question for an attorney licensed where the property sits, since the trigger differs state to state.

How verbal is the verbal 168? I ask because I've watched two of these where the dispo partner's buyer was really a buyer's acquisitions guy who hadn't cleared it with anyone. Ask for proof of funds and a signed purchase agreement with his own EMD before you sign the JV. If he can produce that today, pay the funding cost off the top and stop arguing. If he can't, you're negotiating over a split of nothing.

compass, from what I've read the fear is the buyer renegotiates once they see the spread, or goes around you to the seller next time. Whether that actually happens as much as people say, I don't know.

Nobody's asked what the buyer thinks the rehab is. A 1,100 foot brick ranch at 168 with a full gut is a different deal than one needing paint and a roof, and if his buyer walks the property with a contractor and the number comes back 20k over, your 26k spread is the first thing that gets cut. I'd want to know if the 168 was set from photos or from a walkthrough. If photos, treat it as a 155 buyer until proven otherwise and stop worrying about who pays 2,625.

I'll take the other side from harrow. I've done nine of these and the standard I've landed on is that all third party costs to close come off the gross, full stop, and the split is on what's left. Not because it's fair in the abstract. Because every alternative turns into a line item argument on every deal and you spend the relationship down over four figures.

The place to get paid for bringing the contract is the split itself. If you're the one who found the seller, took the call every afternoon, and posted the EMD, ask for 60/40 and let costs come off the top. That gets you 12,885 versus the 13,000 you were fighting for, and you never have to have this conversation again. If he won't go past 50/50 on a deal where you did acquisition and he made one phone call, that tells you what the next five deals look like.

keystone's version is cleaner and I'd sign it, but only after bramble's test. Signed buyer contract and proof of funds first, split second. Right now you're allocating 4,525 of cost across a 26k spread that one person has confirmed verbally, and 11 days is not much runway to find out you were wrong.