Great questions thanks for asking Larry. Plenty of questions, some more involved than others.
Let`s start with the simple ones, then progress from there.
JV questionnaire, you can find a good template on the REIN™ website.
Click here to view JV support documents., look for file named (JV Questions - doc, JV Application - xls, JV Application 2- doc), each of these have been developed by successful Real Estate investors creating Joint Ventures.
Now for the rest of your question, this can be a bit more in-depth, to cover in a discussion post (as this topic was discussed in the REIN™ JV secrets program for more than 2 plus hours and had a lawyer help out with the discussion). If you have the JV secrets program you may want to review Section #5 Legal Structuring and agreements.
A file, you will want to
review is the JV Ownership Structures - pdf file on the JV support documents.
This outlines 5 different ownership structures and a graphic representation on each.
To specifically answer your question, you first have to identify the following:
i) What you bring to the deal?
ii) What skills or expertise are you missing?
iii) What does your JV partner look like?
By getting answers to these 3 questions you can determine if you can not qualify for mortgage financing, you have your answer that your JV partner needs to go on the mortgage.
If you can potentially qualify on your own, or you can jointly qualify... you now have different options.
Typically, in the beginning, you will always want to keep things simple ... everyone on Title and everyone on Mortgage. You can always branch off from there, but I always like to start simple.
I always give the first option to my JV partner to go on the title of the property... and you will want to ask the question "Do you want to go on the title of the property?" If the answer is "Yes", then ask the next question. "By going on the Title of the property, you do realize that you will have to qualify for the mortgage with me. Will this be an issue?" The answer they give to this question will determine your ownership structure.
If they do not want to apply for a mortgage... use the one-partner ownership structure
If they do want to apply for a mortgage... use the 2 partner ownership structure.
Regarding the questions of risks of not being on the mortgage (one- partner ownership), make sure you have a solid enforceable JV agreement in place, that protects everyone`s interests. Plus if only one party is one the Title, you can register the interest of the other party; via a Caveat, Caution, Second Mortgage, Restrictive covenant (each province has its own variation and name), but essentially you are registering your partner`s interest on the property (ask your lawyer what is the best tool for you to use).
Regarding if it is the norm for your JV partner to provide the funding and the mortgage on the property... this is up to you and your JV partner to discuss and negotiate what is `fair` between each of you.
One Final thought, about if you as the Real Estate expert should be on Mortgage or not, is a question you will have to ask yourself, after talking with your JV partners and your Mortgage Broker. My personal feeling here is as the Real Estate expert and the financial manager of the JV, if you are not on the mortgage of the property, how do you contact the bank that holds the mortgage if you need to make changes? Update accounts? etc... I typically like to be on all the mortgages, but that is my personal choice, as it helps spread the risk (2 people on the mortgage), and as the Real Estate expert I have more control to strategically manage the JV on a day to day basis. But this will be something you will need to discuss with your Mortgage Broker.
Trust this will help you get going...
Cheers
