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.