Trade work for financing?

Question

Has anyone done any creative financing with trade work? My brother is a contractor and is toying with the idea of trading a down payment on a lease option, or something like that.  Any tips for doing something like this? Anything to look out for?.....Thoughts?

Account Closed · Answer

Has anyone done any creative financing with trade work? My brother is a  contractor and is toying with the idea of trading a down payment on a  lease option, or something like that.  Any tips for doing something like  this? Anything to look out for?.....Thoughts?

Professional Services for Equity

In lieu of a deposit or down payment, the seller might be interested in using your professional services. Can you do accounting, graphic design, or perform acupuncture? “As consideration for this agreement, buyer will perform five hours of graphic design work for seller valued at $1,200 to be deducted from the Purchase Price. ”If you have no professional skills, collaborate with someone who does in exchange for part of your profit.

Charles Parrish

Alicia Hensley · Answer

Yes, a construction contractor. He'll be licensed and insured by the end of the year (Utah has a lot of hoops to jump through to get a general contractors license).

I'll be sure to put in the contract who would be responsible to pay for materials and permits and whatever else would be needed. Excellent reminder.

I didn't even think about the taxes. I'm not quite sure how that would work exactly, so I'll have to talk to an accountant.

Thanks for the post. It really helps!

Account Closed · Answer

@Alicia Hensley, when you say your brother is a contractor, are you referring to him being a construction contractor?  Licensed, insured, etc. in his municipality?

As Charles Parrish depicted in his example, be clear of the value and terms, etc.  Be sure to also address things like who pays for the necessary permits (if any), materials, worker's compensation, etc.

Might want to check with an accountant too about the tax ramifications, if any, for the value of the work.

Alicia Hensley · Answer

It helps to see it written down like that. Thank  you!