Contractor partners up with broker
Hello PBers. Hope you all have great results on your RE endeavour this first half of the week. I personally didn't gain anything financially, but got some exciting things to think about.
Besides the multi-division lot I was talking about the last couple of days, I ran into a broker I used to remodel his flips with a couple of years back.
He has lots of deals for sure, and more than 130 agents in his 2 offices spanning the South of the Bay Area here.
He used to get 2-3 bids from a small group of contractors for each flips. None of those contractors have experience in new construction and commercial. Now his company plans to add an in house construction arm specializing in his flips, specifically new developments.
So his idea is to partner up with me. My roles would be to head the construction side, hiring new crew members. He would be responsible for getting all the deals. All funding is from his existing group of investors who have been with him for all these years making a lot of $$$!
Roughly speaking, I would manage the crew to either fix or build at cost, with the help of his existing project manager (who would report to me). I would receive basic pay, plus a percentage of the profit for each project.
Seem to me he also has one more partner, who's been with him all these years.
Questions are:
- How does it sound in general? Notice that I still have my current crew working my flips/builds for me separately. They need very minimal supervision, since all the guys been with me from start (8-12 years). My brother-in-law is helping with running materials from time to time (who is also one of my full time guys).
- How should I get paid (basic)?
- What percentage should the profit be for me?
- How the partnership should be structured?
Tomorrow, I'll be looking at 2 houses, then pick one to try out the model. After checking the houses, I'll meet with both of them to discuss in details, maybe right around noon time - PST. So any input is greatly appreciated.
Thanks in advance.