Fix and flip partnership
Hi everyone,
I've been reading the book "Real Estate Rookie" by Ashley Kehr, this one chapter about Partnerships states that the things you can "bring to the table" are Equity, Sweat Equity, Debt, and Capital.
Equity: your stake or share of ownership in a company
Sweat Equity: performing physical labor in exchange for a share of the company or the property's ownership
Debt: assuming the risk by having the mortgage in your name
Capital: providing cash to start the investment
My question is, for a FIX & FLIP, is it a good strategy to look for a contractor as a partner who will be doing the active work/sweat equity while we use my name to loan from a Hard Money Lender? Given that the contractor will get most of the profit.
The reason I thought of this strategy is that I am on H1B visa, and I am not allowed to do active work besides my current W2 job who sponsored my working visa. I could invest in Rental Properties (which is my ultimate goal) with Property Management for it to be totally passive, but I'm hoping to do a fix & flip to help me raise capital for my first investment & pay some debt that I still have (medical bills).
Your insights will really be appreciated.
Thank you!