Looking to JV with a General Contractor

Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 726 votes

10mo

Hello everyone, I found a partner I'd like to start flipping houses with. He's very well qualified, he actually reached out to me to partner up with. Our goal are the same, to start a flipping business. He used to own his own his own contracting business for 6 yrs, and is now the on site manager of a construction company that builds APT buildings and subdivisions.

I'm bringing the $$, he's doing some labor himself and charging me nothing for labor. Anything he can't do he will charge me book cost for his specialists labor, and cost for materials. HE offered me 70% / 30% partnership. I figure instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him.

My main concern is he doesn't have enough $$ now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around $10K, he said he doesn't own anything outright that's worth $10K.

Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feed since I'll have all the skin in the game financially, if something goes south on the flip and he doesn't make enough to pay me back, or we lose money, how will he pay me?.

@Steve Balinski Why can't you just hire him to be your GC for the first few fix/flips, which hopefully would allow him to build up that $10k?

[email protected]

3 Reply

Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Jaycee Greene:

Quote from @Steve Balinski:

Hello everyone, I found a partner I'd like to start flipping houses with. He's very well qualified, he actually reached out to me to partner up with. Our goal are the same, to start a flipping business. He used to own his own his own contracting business for 6 yrs, and is now the on site manager of a construction company that builds APT buildings and subdivisions.
I'm bringing the $$, he's doing some labor himself and charging me nothing for labor. Anything he can't do he will charge me book cost for his specialists labor, and cost for materials. HE offered me 70% / 30% partnership. I figure instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him.
My main concern is he doesn't have enough $$ now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around $10K, he said he doesn't own anything outright that's worth $10K.
Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feed since I'll have all the skin in the game financially, if something goes south on the flip and he doesn't make enough to pay me back, or we lose money, how will he pay me?.

@Steve Balinski Why can't you just hire him to be your GC for the first few fix/flips, which hopefully would allow him to build up that $10k?

Harder for me to find a deal since he'd charge me more as just a GC vs as a partner. It'd cost me more to hire him vs partner with him. Do you see another way to go about it?
0 Reply
Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 726 votes
10mo
Quote from @Steve Balinski:

Quote from @Jaycee Greene:

Quote from @Steve Balinski:

Hello everyone, I found a partner I'd like to start flipping houses with. He's very well qualified, he actually reached out to me to partner up with. Our goal are the same, to start a flipping business. He used to own his own his own contracting business for 6 yrs, and is now the on site manager of a construction company that builds APT buildings and subdivisions.
I'm bringing the $$, he's doing some labor himself and charging me nothing for labor. Anything he can't do he will charge me book cost for his specialists labor, and cost for materials. HE offered me 70% / 30% partnership. I figure instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him.
My main concern is he doesn't have enough $$ now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around $10K, he said he doesn't own anything outright that's worth $10K.
Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feed since I'll have all the skin in the game financially, if something goes south on the flip and he doesn't make enough to pay me back, or we lose money, how will he pay me?.

@Steve Balinski Why can't you just hire him to be your GC for the first few fix/flips, which hopefully would allow him to build up that $10k?

Harder for me to find a deal since he'd charge me more as just a GC vs as a partner. It'd cost me more to hire him vs partner with him. Do you see another way to go about it?

Find another JV partner and hire him as the GC
[email protected]
0 Reply
Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Jaycee Greene:

Quote from @Steve Balinski:

Quote from @Jaycee Greene:

Quote from @Steve Balinski:

Hello everyone, I found a partner I'd like to start flipping houses with. He's very well qualified, he actually reached out to me to partner up with. Our goal are the same, to start a flipping business. He used to own his own his own contracting business for 6 yrs, and is now the on site manager of a construction company that builds APT buildings and subdivisions.
I'm bringing the $$, he's doing some labor himself and charging me nothing for labor. Anything he can't do he will charge me book cost for his specialists labor, and cost for materials. HE offered me 70% / 30% partnership. I figure instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him.
My main concern is he doesn't have enough $$ now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around $10K, he said he doesn't own anything outright that's worth $10K.
Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feed since I'll have all the skin in the game financially, if something goes south on the flip and he doesn't make enough to pay me back, or we lose money, how will he pay me?.

@Steve Balinski Why can't you just hire him to be your GC for the first few fix/flips, which hopefully would allow him to build up that $10k?

Harder for me to find a deal since he'd charge me more as just a GC vs as a partner. It'd cost me more to hire him vs partner with him. Do you see another way to go about it?

Find another JV partner and hire him as the GC

Why do you say find another partner? What is the purpose of JV'ing vs just hiring him outright as a GC? This is one of my current dilemmas.
0 Reply

Elealeh Fulmaran

Specialist · Member since 2025 · 483 posts · 270 votes

10mo

You're right to pause. If he has no cash, don't do a 70/30 equity split with you carrying all the risk; structure him as an operator with pay tied to performance and secure yourself with control. Put the deal in an LLC with a written operating agreement that gives you decision rights, requires cost-plus, fixed-fee GC terms with milestone draws, and includes a clawback if budgets or timelines slip. Add protections: lien waivers from subs, builder's risk and liability insurance listing you/LLC, a right to replace the contractor, and a cap on change orders without your approval. If he insists on equity, require true "skin" via a cash reserve contribution, a completion bond or performance escrow, and a make-whole priority that pays your capital back before any split. If he won't agree, walk.

1 Reply

Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Elealeh Fulmaran:

You're right to pause. If he has no cash, don't do a 70/30 equity split with you carrying all the risk; structure him as an operator with pay tied to performance and secure yourself with control. Put the deal in an LLC with a written operating agreement that gives you decision rights, requires cost-plus, fixed-fee GC terms with milestone draws, and includes a clawback if budgets or timelines slip. Add protections: lien waivers from subs, builder's risk and liability insurance listing you/LLC, a right to replace the contractor, and a cap on change orders without your approval. If he insists on equity, require true "skin" via a cash reserve contribution, a completion bond or performance escrow, and a make-whole priority that pays your capital back before any split. If he won't agree, walk.

Are you saying basically just hire him as a contractor?
0 Reply

Alan F.

Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes

10mo

Quote from @Steve Balinski:

Hello everyone, I found a partner I'd like to start flipping houses with. He's very well qualified, he actually reached out to me to partner up with. Our goal are the same, to start a flipping business. He used to own his own his own contracting business for 6 yrs, and is now the on site manager of a construction company that builds APT buildings and subdivisions.

I'm bringing the $$, he's doing some labor himself and charging me nothing for labor. Anything he can't do he will charge me book cost for his specialists labor, and cost for materials. HE offered me 70% / 30% partnership. I figure instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him.

My main concern is he doesn't have enough $$ now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around $10K, he said he doesn't own anything outright that's worth $10K.

Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feed since I'll have all the skin in the game financially, if something goes south on the flip and he doesn't make enough to pay me back, or we lose money, how will he pay me?.

To answer your question; he probably won't.

If you're going to endeavor a JV agreement with anyone, have an experienced attorney draw up a JV agreement, with a detailed outline of responsibilities.

0 Reply

Judy Parker

Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes

10mo

Don't do it. He has no skin in the game. Furthermore, "partnerships" never work out. If you find a property you like, use the Bigger Pockets calculator to figure out the rehab costs and do the job yourself by hiring the needed trades.

0 Reply

Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Judy Parker:

Don't do it. He has no skin in the game. Furthermore, "partnerships" never work out. If you find a property you like, use the Bigger Pockets calculator to figure out the rehab costs and do the job yourself by hiring the needed trades.

In my experience its not possible with a full time job, to many phone calls needed, its like doing a full vetting process with a GC x 5-6. Plus finding a trustable, reliable sub for every skill could take years to find. I don't have the knowledge to walk through a house and determine what rehab costs would be. How much for plumbing, hvac, electrical, what needs to be done in each of those 3 categories.
1 Reply

Bill Goodland

Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes

10mo

Issa no for me dawg

0 Reply

Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Bill Goodland:

Issa no for me dawg

I hear ya, I feel like there has to be a good way to partner with a contractor though, just seeking people who've done it. Seems like a win on both ends when all said and done, just unsure of all the protections I'd need in place, or if its just highly not recommended. I'm pretty new to flipping (done 2 in the past), I really want to learn the trades from someone like this potential partner.
0 Reply
Bill Goodland
Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
10mo
@Steve Balinski I would say he needs some kind of skin in the game. I would recommend that if you want to work off each others strengths, get a rock solid agreement in place where you project typical labor costs, typical profits for this deal and create something that aligns interests.

For example, if you're putting up all the money, expect to pay 20k in contractor labor, expect to net 40k on the deal in gross profit, say you'll give him 30% of any profits over 40k along with his 20k for labor at job completion. It incentivizes him to move quickly and keeps costs down while minimizing your risk if you really want to partner but honestly it doesn't seem like he's bringing a ton to the table
0 Reply

Scott Anthony

Real Estate Investor · Troutdale, OR · Member since 2012 · 4 posts · 3 votes

10mo

@Steve Balinski

I'm a GC in Idaho and I can tell you I have over 10k in tools alone. I'm not sure why he has say on the split when your the flipper? However weekly draws are the most important part of flipping. If the GC walks off its terrible for the flipper and just make everything cost more. The weekly draw is only paid on proof of work completed video and photos sent as verification.

No one works for free, that would make me a little hesitant based on what he said. Sweet equity is great but that is more your sweat not his.

The last comment in this thread she really spot on. But if you don't want to deal with all the lawyers, paperwork and fees. The only solution is to find a new GC or sub out the work yourself and become your own GC. Definitely not ideal but another solution all the same.

If you do go that last route have a few GC overlook the project and give bids on what needs fixed and then at least you'll have a game plan for the subs.

Hope it helps.

1 Reply

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

10mo

He's getting paid 30% of the profit rather than a GC fee...that's the headline.

Whether you pay him a GC fee or you split the profit is not that relevant (assuming they are a similar amount). What's relevant is him hitting the contractual budget, with little exception. And he has no incentive to perform free labor or just charge you cost...he gets 30% of the profit from that...and 100% if he just charges you for it instead (it's inherently flawed...ask me how I know...).

Separately, I'd prefer to hire a GC/partner that does not have a full time job.

3 Reply

Stuart UdisPro Member

Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes

10mo

There’s a few things that stand out...

”Harder for me to find a deal since he’d charge me more as a GC vs. Partner. Have you gotten proposals from other general contractors confirming the 30% profit split is less than a GC would customarily charge as a fee for the same scope of work? If the profit margins don’t work paying ordinary GC fees, you shouldn’t purchase the real estate. The economics don’t work.

“I don't have the knowledge to walk through a house and determine what rehab costs would be. How much for plumbing, hvac, electrical, what needs to be done in each of those 3 categories.” Until you’re comfortable creating work scopes and budgets you shouldn’t be in the flipping business. You will be taken advantage of.

[email protected]

4 Reply

Steve Balinski
OP
Roselle, IL · Member since 2016 · 131 posts · 31 votes
10mo
Quote from @Stuart Udis:

There’s a few things that stand out...
”Harder for me to find a deal since he’d charge me more as a GC vs. Partner. Have you gotten proposals from other general contractors confirming the 30% profit split is less than a GC would customarily charge as a fee for the same scope of work? If the profit margins don’t work paying ordinary GC fees, you shouldn’t purchase the real estate. The economics don’t work.
“I don't have the knowledge to walk through a house and determine what rehab costs would be. How much for plumbing, hvac, electrical, what needs to be done in each of those 3 categories.” Until you’re comfortable creating work scopes and budgets you shouldn’t be in the flipping business. You will be taken advantage of.

Good feedback, let me clarify. Lets say we're looking at a 30K profit, I'd get 21k, he gets 9K. I'd have to imagine a GC would make more than that just doing the job outright.

Nobody just getting into flipping knows how to calculate the rehab costs, thats what the GC is for. With a partnership agreement, he'd be dis-incentivized to rip me off as it comes out of the profit. As a GC, again I'd rely on a GC to calculate rehab costs either way.
0 Reply

Avery Robertson

Firth, ID · Member since 2018 · 78 posts · 25 votes

10mo

I'm a hard money lender in Idaho and I've seen similar arrangements go south quickly. There has to be a lot of trust and understanding of someone's character to get into an arrangement with someone that has no skin in the game. Or you need to make sure you have control that you can protect your investment. Ideally get him to put some skin in the game. If he doesn't have any don't put him on title. Figure out a contract for your agreement but you stay sole person on title. Don't just give him the purse strings for the rehab. Do it in intervals as you see work progressing. Documentation and clear communication are all key to success. If he objects to any of that, walk away and congrats, you just saved yourself some headache beforehand. Those are just some initial thoughts to consider.

1 Reply

Stuart UdisPro Member

Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes

10mo

@Steve Balinski You’re actually validating my point. Using your example with a $30K profit when the GC is only making $9K, that deal only works because of a favorable arrangement with the GC not because the investment opportunity itself is strong. You want to be in real estate transactions that stand on their own, without relying on favorable arrangements. What happens when that GC partner gets disinterested after cost overruns wipe out his margin? Becomes ill? Gets a job offer that pulls him away mid renovation? You’re suddenly hiring a new GC mid-project who’s charging full market rates for overhead and profit, and by your own admission, you don’t have the experience to manage or step in yourself. That’s how people get stuck.

When you’re still learning, start with rehabs that can function as a rental and can absorb your mistakes. If you go over budget, the deal might not be as profitable, but it still works. Use this time to build relationships through local REIAs and meetups, and learn from other investors. Plenty of investors learn costs before their first flip. Are they proficient? Not always, but know enough to mitigate potential issues. If you are going to be reliant on GC's to feed you renovation costs, you're setting yourself up for failure.

[email protected]

2 Reply

Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

10mo

@Steve Balinski

i looked at your past posts and it looks like you've done a few flips previously, is that right? i think you mention that here as well.

i was struck by you saying that you think you "can't" do a flip unless you partner - that to me just means you're not buying properties at a deep enough discount.

and yes, finding subs for something specific can be a huge pain. sometimes i have to make 10-20 calls to find a specific trade. but i just do it.

no offense intended, and i know almost zero about you, but it sounds like both you and the potential partner may be undercapitalized. that seems like a risky basis to start a partnership on.

0 Reply

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

10mo

A typical flip here in Milwaukee will take about 500-700 man hours of labor, which in reality spreads over 4-5 months. If he does this on the side, you could easily look at double that timeframe. What makes or breaks a flip is how much you pay your subs. If you have a total of 10 subs (demo, electrician, plumber, carptenter, tile guys, flooring guy, roofer, landscaper, drywaller, painter, HVAC, mason, asphalt, concrete, tree guy,.. that's 15) and you pay every one 2k more than budget, that's 20k-30k and poof there goes your profit. The questions rellay is how much of these trades can he replace. 20% or 80%? If he will sub out most and does not manage that cost, you end up holding the bag.

This is too risky. You can partner with him, but not at this scale. What you need are a few pilot projects, he can do subcontractor work for you and earn your respect, that's the entrance fee for beeing considered a partner in the future.

Be VERY cafreful who you partner with. It's like getting financially married and most end in a nasty divorce.

0 Reply

Charles ClarkBusiness Member

Real Estate Broker · Milwaukee, WI · Member since 2020 · 306 posts · 209 votes

10mo

@Steve Balinski
You’ve got a solid opportunity here, but your concerns are valid — partnerships without shared financial risk can get messy fast. Skill + experience is valuable, but there has to be accountability and protections for the money partner, especially on a first deal.

A few ways to protect yourself:

1. Structure it as a Joint Venture with clear roles & exit terms.
Spell out responsibilities, timelines, budgets, and what happens if the project goes over cost or falls apart.

2. Require performance-based compensation.
If he’s not bringing cash, he should bring guarantees in the form of fixed deliverables, milestone deadlines, or profit share tied to actual performance.

3. Put all funds into a controlled project account.
You approve spending, payouts, and contractor draws — not him alone.

4. Start with a small, low-risk project.
Treat the first flip as a “test run” to see if the partnership actually works.

5. Consider a hybrid model: profit share + fixed contractor agreement.
This protects your capital and still rewards his sweat equity.

You can definitely make this work — just get everything in writing and set up real guardrails so you’re not the only one taking financial hits. Happy to talk structure ideas if you want!

[email protected]414-719-6090

Raise the Standard RE LLC54 Reviews

View Page

0 Reply

Patrick Goswitz

Flipper/Rehabber · Knoxville, TN · Member since 2023 · 47 posts · 20 votes

10mo

Pretty similar to what you're saying. I have never done this but I have looked into it. If anyone else has experience with something like this let me know or please critique away:

EXPENSES
Home Purchase $257,324
Material Costs $20,000
Utilities $1,000
Interest $5,000
Insurance $500
Total $283,824

INCOME
Net to seller at closing $344,405

PROFIT
Profit= $60,581
Split 50/50= $30,290.5

You buy the house and are the only one on the deed. I would much rather have only me on the deed. GC pays for all of the labor no matter what. That is their skin in the game. They now have every incentive to work fast, keep labor down, and do good work because they aren't getting paid until you do. Only risk I am seeing for you is that you're paying for the material, interest, insurance, and utilities upfront which you would do anyways on your own flip. If the GC leaves, well that is why you're the only one on the deed. I would make sure you can take the deal on yourself financially in case the GC leaves. They obviously want their peace of mind so have some sort of profit share agreement.

0 Reply

Looking to JV with a General Contractor

Looking to JV with a General Contractor

Most Popular Reply

24 Replies