Due Diligence on Flip Partnership
Hey all, Buy & Hold investor from Providence / Rhode Island area. An opportunity presented itself to me over the last few weeks, I have to act quick and everything seems on the up and up however would like to bounce thoughts of the community.
It's a small flip bought off of an estate sale in Warwick, the guy i'm considering partnering with has a lot of experience flipping, he got the house for $160k, he thinks ARV is $230 and given his experience I'm inclined to trust him, however when I pulled up to the house it just screamed $200k at me.
He put $3k as a deposit, using hard money for the purchase and he estimates repairs at $13,250 which is very very low and not something I would be able to do on my own but he says because he has the construction business and experience he can't imagine it going more than $1k over that and that probably won't happen. He would like my money for the repairs and we'd go in 50/50 on an LLC for the flip for risk and reward. Doing the math I can make $20k on a $15k investment in 3 months. The reward is there but what should I be looking for at the negotiating table for terms in the LLC?
I do not know the guy and never met him but he was referred by a wholesale agent that I have met with in the past. Any tips?