How do youPartner with a contractor? Who pays for what

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How do youPartner with a contractor? Who pays for what

Kenneth Moerschel
Rental Property Investor 路 Brooklyn, NY 路 Member since 2019 路 45 posts 路 5 votes

I have a contractor who reached out to me and wants to partner with me.

he wants me to secure the property and pay for the material and the work but wouldn鈥檛 that just be me hiring somebody?

what should be the percentage of what I should and once we do a flip?

The area were looking to invest is Philly Pennsylvania. Newark NJ etc.

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Don Gouge
Johnson City, TN 路 Member since 2017 路 209 posts 路 367 votes
7y

He is bringing nothing to the table but his dream.

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  • Don Gouge
    Johnson City, TN 路 Member since 2017 路 209 posts 路 367 votes
    7y

    He is bringing nothing to the table but his dream.

    1Reply
  • Troy Sheets
    Developer 路 Philadelphia, PA 路 Member since 2013 路 1k+ posts 路 902 votes
    7y
    Originally posted by @Kenneth Moerschel:

    I have a contractor who reached out to me and wants to partner with me.

    he wants me to secure the property and pay for the material and the work but wouldn鈥檛 that just be me hiring somebody?

    what should be the percentage of what I should and once we do a flip?

    The area were looking to invest is Philly Pennsylvania. Newark NJ etc.

    If he sucks as a contractor you probably can't get rid of him or cut him out of the deal, so I'd be very careful. 

    I partner with other investors but I have a balance sheet and credit. I also find the deal, the bank, the architect, get the permits, either GC myself or hire out the GC work on larger projects (~8 units and up), then lease the building up myself. My investor partners bring some or all of the cash to purchase the project and fund any equity gap to kick off construction. GC's are a commodity, don't tie yourself into one without at least having done a couple projects with them. 

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  • Jared W SmithBusiness Member
    Architect 路 Westchester County, NY 路 Member since 2018 路 681 posts 路 476 votes
    7y
    Originally posted by @Kenneth Moerschel:

    I have a contractor who reached out to me and wants to partner with me.

    he wants me to secure the property and pay for the material and the work but wouldn鈥檛 that just be me hiring somebody?

    what should be the percentage of what I should and once we do a flip?

    The area were looking to invest is Philly Pennsylvania. Newark NJ etc.

     Seems like a lousy partner/plan. Odd that he's approached you, for you to do all the work up front but he wants equity? I'd pass. 

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  • Kenneth Moerschel
    OP
    Rental Property Investor 路 Brooklyn, NY 路 Member since 2019 路 45 posts 路 5 votes
    7y

    @Don Gouge thanks for the reply 馃憤馃徏

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  • Kenneth Moerschel
    OP
    Rental Property Investor 路 Brooklyn, NY 路 Member since 2019 路 45 posts 路 5 votes
    7y

    @Jared W Smith thanks for the reply 馃憤馃徏

    0Reply
  • Kenneth Moerschel
    OP
    Rental Property Investor 路 Brooklyn, NY 路 Member since 2019 路 45 posts 路 5 votes
    7y

    @Troy S. Thanks for the advice. Appreciate it!

    0Reply
  • Frank Wong
    Real Estate Broker 路 Bay Area 路 Member since 2018 路 1k+ posts 路 3k+ votes
    7y

    Never partner with a contractor. There is no upside for you. Keep the relationship separate. You hire him and pay him for his work. Easy and everyone is happy.

    1Reply
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