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Account Closed
  • Dover, DE
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JV between Contractor and Investor

Account Closed
  • Dover, DE
Posted Jul 19 2017, 09:48

Hi there. My company currently works with an investor who buys and sells the homes we fix. They pay us for the work we do and that is the extent of the deal. We are very happy with this setup as they provide plenty of work for that division of our business. 

We now have an opportunity to work with 2 investors (partners) who want to do a JV between us and them. The thought initially is to flip homes with possibility of looking at multi family units to rent at some point. We are in the beginning of talks about this but was hoping for some input from others who may have experience in this setup. I have ideas of how it could work but would be very interested in hearing from others. A few questions I have.

1. Is it typical that the contractor would get paid cost for labor and material plus a margin or would the margin be obtained at the end.

2. What would a typical split be of the profits after contractor and investor are paid. (They want to be involved in finding the homes and deciding on finish options for the home but no involvement in the project itself - which is our specialty)

3. Have you had positive/negative experiences doing this? From the contractor or investor side.

Thanks!