How are you handling JV splits in your business?

[Dave Godfrey]

Hi BP-land!

Just looking for thoughts on how you might handle this scenario.

We are about to do a joint venture (JV) project with a contractor. It's a cash only property from the MLS. He can't put up the purchase price but he can handle all of the work to complete the project. Thus, we would purchase it, and the contractor would rehab it. How are you handling JV splits in your business?

 Here is some basic info:

$145k purchase price

$45k rehab costs

Total $190k all-in

Resale price:  $270k

There are transaction and holding costs to be considered but there is approximately $65k net profit in there.

What kind of dollar ($) or percentage (%) split should I, as the purchaser, ask for?  

Any other tips, ideas, or other considerations?       

This is a guy I know well and has experience in flipping.   If this goes well, this could set the precedent on how we do business again down the road.

Thanks in advance for any and all comments!

Dave