Flip Partnership Details
I'm looking for advice from those that have done so on how to best form a partnership between an investor and a contractor for flipping houses.
I have rental houses in one city and live in another city 800 miles away. I have had a contractor doing roofing, siding, handyman repairs, etc. for 4 years, and we've built a good working relationship. So I'd like to identify a wholesale house or REO that's a fixer and we'd partner on it. I'd handle finding the house, acquiring it, setting up an LLC and/or land trust etc., getting insurance, and bookkeeping. He'd manage the on-site project: managing the rehab, getting materials, getting permits as needed, and so on. In the end, we'd do a percent split of the net proceeds after all expenses.
In this situation, what would be the best way to proceed? I'm thinking of a number of questions:
* how to legally set it up
* how to make sure we're set up for taxes after the sale
* what percent split makes sense and is fair
* who buys and owns tools that are needed for the rehab
* other risks I'm not considering
I'd appreciate any guidance on how to do this.
Most Popular Reply
I'm not sure why you would partner with him if you are in charge of acquiring it and putting up the money. Thats the hard part. I would just hire him as a project manager and perhaps do a bonus for good work.