I'm looking at a couple vacant sites in my area that will support the construction of duplexes.
I have a GC who would be interested in partnering and would be in control of the construction aspect.
What is the best way to structure a partnership for this kind of project, especially if we may do up to 4 of these at one time together?
Should I buy the land and then he supplies the down payment on construction? Any thoughts would be appreciated.
The simple answer is get together with an attorney to put all aspects of the project in writing. Formation of an LLC/LLP & who's going to do/pay for what, whether it's 50/50 or otherwise.
The not so simple questions are that of trust and putting those pieces in play, understanding the business lines you've both drawn on the project. Sit down and talk it out as much as possible. The good, the bad, and the ugly. The more protections you both can put in place on the project the better. Invest as much if not more into the "what can go wrong" in the partnership as you would the upside.
Form an LLP and contract out the terms of your project for all the lots. The payment structures for down payment and construction are really up to you, but just makes sure it's in writing and you both are clear what your stakes and responsibilities are.
Thanks for your input. I feel good about the two potential partners I would consider, my concern is determining the best way to organize it. LLP sounds like a solid way to do it and, ironically, one of the folks I would consider partnering with is my attorney.
Does it seem reasonable to say that I could fund the purchase of the land, which would be about 100k and the partner funds the down payment for the construction, which would be in the same ballpark?