Is this a good partnership?
Myself And a contractor friend have a house under contract. The deal is I found the deal we got the hard money together. He fronts all renovation cost(he has a construction company) we split the profits 50-50. We plan on continuing in this manner. Any thoughts?
What happens if he doesn't perform on the renovation? What happens if he goes over budget? What happens if his quality is bad? What happens if he walks off the job?
Do you have the ability to fire him if he does a bad job or slips the schedule? Who pays to bring in new contractors?
I've seen the situation happen plenty of times, so make sure you discuss this contingency. I'm sure he will tell you that there's no chance that he won't get the project done on schedule, on budget and high quality. But until it's done, that's only talk.
Quote from @J Scott:
What happens if he doesn't perform on the renovation? What happens if he goes over budget? What happens if his quality is bad? What happens if he walks off the job?
Do you have the ability to fire him if he does a bad job or slips the schedule? Who pays to bring in new contractors?
I've seen the situation happen plenty of times, so make sure you discuss this contingency. I'm sure he will tell you that there's no chance that he won't get the project done on schedule, on budget and high quality. But until it's done, that's only talk.
I understand what you are saying, we have contingencies in place for moth the things you mentioned. I guess my exact question is, if everything goes right does the above partnership seem even. Is it in line with most partnerships of this type.
thanks!
Quote from @A Carter:
Quote from @J Scott:
What happens if he doesn't perform on the renovation? What happens if he goes over budget? What happens if his quality is bad? What happens if he walks off the job?
Do you have the ability to fire him if he does a bad job or slips the schedule? Who pays to bring in new contractors?
I've seen the situation happen plenty of times, so make sure you discuss this contingency. I'm sure he will tell you that there's no chance that he won't get the project done on schedule, on budget and high quality. But until it's done, that's only talk.
I understand what you are saying, we have contingencies in place for moth the things you mentioned. I guess my exact question is, if everything goes right does the above partnership seem even. Is it in line with most partnerships of this type.
thanks!
There's no right or wrong way to structure a partnership, as long as both sides are happy with the agreement.
In general, I like to think that in a partnership, the money is worth 50% of the deal and everything else is worth 50%.
So, if you guys are for the most part splitting the cost and splitting the effort, and 50/50 is about right. If one of you is putting in both more money and more effort, then consider modification.