Should I partner?
I have a friend who wants to get in on my next deal but I'm having trouble figuring out how to partner with somebody in a way that makes sense to both of us. I've found a niche that I like of rehabbing foreclosed homes in an area where I can flip them or rent them for a descent price. Thus far my first flip and my first brrrr were paid in cash with some rehab done from a personal loan. Only now am I doing a refi to get back my initial investment on the brrrr so that I can do another project. The flip will hit the market next week.
I'm not the type who likes to leverage heavy and I'm content doing 2-4 projects a year at this point with cash reserves I have or can generate. So the question is if there's really a point and what the benefit would be for me? Say there's a property for 40k and for 20k of work it would appraise at 85k. I could make that work solo (albeit difficult) but it would be more manageable with a partner...so besides that benefit of less money at risk how would I benefit? How would I profit more than going it alone? If I structure it as 50-50 for the funds, do I propose 60-40 for payout as I am managing the systems? Do I propose simply paying a percentage of interest to my friend rather than a partnership (and if so, why not simply use a hard money lender)? I'm just trying to figure out to make this a win-win...I would love your advice. What are some way you would advise? Thanks!