Advise on a wholesale flip profit sharing
Hi BP community,
I am pursuing a foreclosure property for a flip and since this is the first time, I am partnering with a contractor to get the work done. Below are the details:
Purchase Price : 215k
ARV : 310-315k
Rehab (including materials) : 30-35k
Materials : 12-15k
Time to rehab : 4-6 weeks
Total planned holding time : 5-6 months
Backend realtor commission : 3%
The contractor is a friend of mine and wants me to finance the deal including materials and wants to come in with his sweat equity for the rehab.
Question : he wants a 30% cut of the profits after deducting selling realtor commission and all holding costs. I am pushing for a 25% cut for him.
Is this reasonable or am I being too greedy ? How should I structure the deal with him so I don't get burnt and anything else I need to take into consideration ?
Thank you.