Hi guys! I am doing a flip with a friend of mine. This is my first time using a partner, (but not my first flip) and have a few questions. She provided the cash to purchase the house, we put it in her name, and I will be doing the renovations. We will split profit 50/50 at the end. At closing, how do we split profits legally, so that she doesn't end up paying all the capital gains? We haven't closed on the house yet, she just signed contracts. I haven't used any type of entities yet in my investments, but wondering if I should in this situation to protect her? Any advice is greatly welcomed!! Thank you!!
How exciting for you both!
I'm in NO WAY an expert. I actually have a financial planner who makes these types of decisions for me. But if no one else answers, I'd say you need to create an LLC or something. But if she's already signed, is it too late? I guess they could draw it up again and she could resign as the entity, assuming they were willing to do that.
GOOD LUCK and I'd love to hear the final outcome!
just present a bill to escrow company for the amount of profit and label it consulting, rehab or another category