Protecting Myself In a Partnership While Flipping
I live in the Waco, TX area, and am looking to flip homes here locally in the McLennan County area. I currently run two businesses here in town, and time is my perishable commodity. Flipping doesn't sound like a great idea if I've got to do it all myself.
Enter a high school friend who has opened his own construction business. I have enlisted him to be my project manager/work some of the project himself.
Our Agreement is verbal in nature only. I will provide 100% of the financing (most likely through leveraging a bank loan), handle acquisition and analysis of target property, and sale of the property. While his end would be to oversee the rehab of the project, make sure we stay on budget, finish within time frame allotted,and help to mitigate cost with his expertise. However, he would not be financially tied to the property. My partner and I will split any profit 50-50.
My question(s) for the forum is, How do I make it to where he is obligated to finish the job? Is there some sort of a contract I can ask him to sign? Would adding his name to the ownership of the property when acquired work? What avenue would you pursue in my situation to not over-leverage myself in regards to the partnership?
Other Pertinent Information We do not have any properties in play. None of my money is currently at risk. My back up plan would be if he bailed on the project to rehab, refinance, and it and turn it into a buy and hold property
Thanks for your time, and any feedback is welcomed and appreciated.