My first attempted deal came to minus 3,150 after the JV split

Everyone talks about the fee. Nobody publishes the spend on the ones that die, so here's mine.

Spend: 2,300 on marketing, which was 900 skip traced records plus a dialer month and postage on a small mail drop. 210 in gas across roughly 600 miles. Earnest money 1,000 with 500 going hard at day 10. Title search 350, which I paid because my JV partner said his title company wouldn't open until we had a signed JV, and I wanted the search first. 290 for a mobile notary trip that ended up being wasted. Total 4,150.

The deal: 1950s house, seller was the daughter of the deceased owner, deed still in her father's name. She told me on the second call that everything had been handled. Nothing had been opened. In that state the transfer needed an estate proceeding and the attorney's estimate to get to a signable deed was seven months, assuming no other heirs surfaced. There's a sibling nobody has spoken to since 2019.

My partner walked, correctly. Our JV agreement was one page, split 50/50 of any fee, silent on costs. So he was out zero and I was out 4,150. I got 1,000 back off a wholesaler friend who bought the rest of my skip traced list, so call it minus 3,150.

What I'd do differently. Written cost sharing per deal, before spend, with a cap. Ask about the deed and the death certificate on call one and pull the county record before I drive anywhere. And I'd have made the earnest money fully refundable through a longer diligence window given who was on title.

Answer

1luis_carrera Get yours

Both things you two are arguing about are downstream of one missing item. There was no per-deal budget with a stop point, and no gate between spend stages.

I've built mine as four gates because I over-analyze everything and this is the one place it pays. Gate one, before any spend on a specific property, is the county record: who's on the deed, when was it recorded, any liens or open cases visible. Free to twenty dollars in most counties, and roughly a dozen states don't publish sale prices at all so you may get less than you expect from the same portal. Gate two, before earnest money goes hard, is the title search. tally, you did that one in the right order and it still cost you 350 because the estate problem was already known by then. Gate three is the JV cost split in writing with a cap, so you know your worst case before you drive. Gate four is the buyer verification, one live buyer at your target price.

On keystone's point, an expensive channel with a 20 percent close rate is survivable. An expensive channel with no gates is what produced the 4,150, because nothing in the process could stop the spend. The 290 notary trip happens only in a process with no stop point.

The thing I'd take from your writeup and put in every agreement I sign: silence on costs means the person who spends is the person who loses.

6 replies

1jordan_ellis2ActivePRO6

Thank you for publishing the dead one. Six months in with nothing closed and this is the post I needed, because my spend looks like yours and I'd started to think that was the failure.

Question on the 2,300. What did the 900 records produce in conversations? I'm trying to work out whether my cost per contract is bad or whether I just haven't run enough volume to know yet.

1gregpowell66AG4BPRO8

The 290 notary trip is the one that would have annoyed me most, because it's the pure waste. Everything else bought you information.

I'd add that a title problem and a structural problem behave the same way. Both are cheap to check early and expensive to discover late, and both are invisible from the curb. Pulling the deed is your equivalent of getting under the house before you price anything.

2Rena Expert

Cost allocation is the part of a JV agreement that most first agreements leave out, and your one pager is typical. A workable version names each category of spend, says who funds it, and says whether the funding party recovers it off the top of the fee before the split or absorbs it as their own cost. Both structures exist. Off the top favors whoever spends more, absorbed favors whoever brings the harder-to-replace contribution. Either way it should be a number and a cap agreed before the first dollar goes out.

On the estate question, the mechanic is that a deed signed by someone who isn't on title and has no legal authority to convey doesn't move ownership. Getting authority requires a court process in most states, and the name, the timeline and the cost of that process vary by state, sometimes with a short affidavit route for small estates. A licensed attorney in that state is the only reliable source for which route applies.

The screening cost here is small compared with 4,150. Confirming who is on the deed is often free from a county record, and asking whether a probate case exists on the first call takes one sentence. That single question would have redirected your spend.

My answer assumes your partner's walk was reasonable on the facts. A seven month timeline with an unlocated sibling makes the exit unpriceable, so his decision doesn't tell you anything bad about him. The silence on costs does tell you what to fix in the next agreement.

2samantha_ruizAU4APRO6

I'd argue your cause is the lead source, not the JV. 2,300 to get to one contract on an unopened estate is an expensive channel and it would have hurt whether or not you had a partner. The split just made the loss visible.

I went through the same arithmetic at deal four. My cost per signed contract was 1,900 and my average fee was 8k, and the fees split with a dispo partner. That math works only if the close rate is high, and mine wasn't, because I wasn't screening title early enough either.

2carlos_nunezActive

Mine was 1,700 and a month on a property where the seller turned out to be one of four owners of an LLC and the other three said no. Same shape as yours, different door. I now ask who has to sign before I ask what they want for it.