My father & I are considering entering a partnership with a good friend of mine who is an experienced contractor. We would like to flip to earn capital for future buy and holds. My questions are: 1. Should we form some type of entitiy (LLC) or just do a joint venture since this is our first flip. 2. What percentages should we use: 33.3% each? Should my dad & I get a higher percentage since we are putting up the money. Should we just pay my contractor friend his rate and go 50/50 with my dad? One more thing, I plan on spending 15-25 hours a week on the flip myself (I've designed & built a house for my parents & maintain my parents rental (their old house), so I'm pretty handy). I've heard the saying " A partnership is the hardest ship to sail & I don't want to go down in high seas with my dad & a good buddy. Thx for your input.
Based on what you said and being in Sacramento, where I'm guessing houses to flip could need between 300-400k cash and you might be looking at 50-100k of repair costs you should probably go the 50/50 and hire your friend.
Have you already figured it out Jeff? I'd like to hear what others have to say as well.
Will, I posted this on another forum. The general consensus was to hire my friend (like you said) and figure out a time for money split with my Dad since I will be working on the flip too.
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