House rehab and partnership
I am thinking of proposing a partnership with a general contractor I know. I was thinking about providing the financing and funding for the flip costs. The GC would handle all of the rehab details.
My questions is what seems like a good percentage split for the profits?
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Why would you give him a split as opposed to just paying him as a contractor?
If you give him a split, you have to figure out what happens if he doesn't do a good job, or of you have to fire him, or if he walks off the job, or if he gets hit by a bus, or if he goes bankrupt and is unable to pay his subs, or if you are unable to sell the house and have to hold it is a rental, or if there are no profits, or any other perfectly reasonable situation where things get very difficult and confusing.
For these reasons, I would never ever ever partner with a contractor... And if I were a contractor, I would never want to partner with an investor for very similar reasons.