Partnering with contractor to better use SDIRA funds

[Shera Gregory]

I want to be able to do a rehab/flip with my $43k Roth IRA that is in an LLC. The problem I see is that I can't be sure how much the rehab will really cost and it is not likely that I can find a non-recourse loan.

One of my contractors asked if it would be helpful if he pays for and completes the rehab work and gets paid from the sale of the property in exchange for a share of the profits. He said he would be willing to book the work at his cost. But even if he just did the work with a normal mark-up it would still accomplish what I need to do which is to buy with the cash I have and get the flip done without a loan. So his idea seems like something that could work. I would be interested to set up a JV agreement with him for just one deal to see how it goes.

I am sure there are many pitfalls to consider/avoid. Any major ones that come to mind? Anything essentially wrong with this idea?

Thanks,
Shera