Partnering with handyman?

Question

Hello BP,

Thanks for taking the time to read this! I am looking at partnering with my handyman on some future deals. We will be meeting this weekend to discuss the terms. I have been searching a lot and can not seem to figure out the beat way to structure the deal. Can anyone help me out here? I’m not sure if I should have him with a little skin in the game or whether we should split 50/50, I’m not sure what to do. I am open to any and all suggestions.

Thank you!

Mike McCarthy · Answer

@Mike Balcom as just a handyman, it doesn’t sound like he brings much to the partnership. There will of course be 100 things he can do, but 1,000 things that he probably can’t or shouldn’t.

If he’s acting as a GC, that’s a different story. A good GC has good contractors available and coordinates it all. The crux of that sentence is GOOD contractors. Anyone can find a contractor and then have to deal with cleaning up the mess afterward.

Make sure you’re bringing in the right partner!

Marc Winter · Answer

@Mike Balcom,

Forget that he is a handyman-- structure your 'partnership' as you would any other.  You do not say what you will be buying; a flip, brrr, or long term hold.

Will he be doing work on the property?  How much work? Who will purchase supplies and materials, etc?  Oh, and who will make the final decisions regarding the property?

Unless he invests with you, you'd be better off just hiring him to do work.  IMHO, in this type of situation, if you don't have skin in the game, what exactly do you have to lose?

Calvin Ozanick · Answer

Do you plan on splitting the capital investment upfront as well? If so then his share would depend a bit more. It also depends on the price of the deal, how much work should be done. I have seen suggestions that Project Management could be worth anywhere from 20-40% of the deal and capital is the rest. Good luck!