Realtor · San Antonio, TX · Member since 2022 · 2 posts · 0 votes
I am a realtor who is teaming up with an experienced General Contractor on my first flip. My role is essentially a private money lender for half the down payment. What type of agreement/contract should I have with my General Contractor? I am hoping we don't have to form an LLC as I'm not sure this arrangement is going to work for the long-term. My general contractor has an LLC for his construction business & I have a LLC for my real estate business. Do we buy the property under his LLC? Is this something our hard money lender can help us with? I honestly don't know what I don't know & need guidance.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
depending on the lender you could simply do a TIC arrangement.. IE Tenants in common as to 50% each if your putting in equal money.. Although the LLC route with very good buy sell agreements is probably much safer if you guys ever have a falling out.
Developer · San Antonio, TX · Member since 2019 · 176 posts · 81 votes
3y
The Joint Venture (JV) route is much easier with an LLC. Everything in the LLC will be in writing and you can specify each others role in the operating agreement. I definitely would not feel comfortable in buying in someone else's LLC unless you have a promissory note/lien secured to the property somehow that will pay out half of the profits when sold