Hi all!

So my husband Chad and I are a design/renovation team and I am very near the end of my licensing course to become a real estate agent in New York, and I've have accepted a position with Century 21. We are looking to flip a property near Ithaca, NY, in the Finger Lakes region.

One of my husband's clients, "John", is a real estate investor (he deals with higher end rentals near Cornell University and Ithaca College) and has seen the work we do. He likes us a lot, and has decided he would like to fund 100% of a flip with us. The deal we last discussed over coffee is that he will bring every cent needed to purchase and renovate a house, and will take 2/3 of the profit at the end. We will take 1/3. He is willing to allow us to draw payments throughout the flip so my husband doesn't need to work at other job sites and can focus all of his time on the house we buy, and he wants us to take that amount out of our share at the end. He wants the house to be in all three of our names.

We're looking to do something simple to start, and our ideal budget would be under $175k for the purchase and renovation. Hoping to sell upwards of $225k (shouldn't be too hard in our region).

John is also interested in starting an LLC with us after this first flip and building a business doing this together.

So Chad and I were thinking the split seems a bit high in his favor. Yes, he's coming up with ALL the money (hallelujah) but we are doing ALL the work, but not just as your run-of-the-mill contractors. We'll be overseeing all work done, doing a huge amount of ourselves, researching materials, designing, staging, etc.. John wants absolutely nothing to do with the rehab, and wants us to manage everything from finding the property to running the numbers to marketing and selling afterwards.

I'm confused about the role of an investor in this case. Is John more like a bank? or is it that he owns this house like a business and we're his employees? An attorney I talked to today was confused about why he's giving us a cut at all. (She was a real estate attorney but admitted she knew little about flipping.) On the other hand, a friend of mine who started with very little renovation experience acts as the GC on her flips and treats her investors strictly as lenders, and has done very well so far.

My feeling is that I would be alright with taking 1/3 on our first deal with John, but only if the cost of my husband overseeing and performing all work goes into John's renovation costs rather than coming out of our share at the end.

What do you guys think? Are my desires reasonable? If so, how do I present my case to John?