Shared Profit Flip - Financier and Contractor

3 Replies

I’m curious how other people structure deals if you’re going in on a flip with one person financing everything and the other person providing all labor at cost (in other words, the contractor will profit based off of finishing early and split the profit with the financier)?

I do not split deals with labor I can hire, pay and keep all the profit myself...and also fire if they do not preform.

@Zach McLean if you are just serving as the contractor there would not be any reason to split profits. If you found the deal and put it under contract that’s different.

There are a lot of ways you can structure things but I like to keep it simple.

If you are finding the deal, managing the construction and handling the sale  and the investor is just putting up the money then a 50/50 split of the profits after all costs would be a fair deal. 

Lynette said it best, a contractor doing the labor at cost is no reason to give up 50% of your profits,there is not enough value from that side to give that much up. Perhaps if he was doing all the labor for free, that could work. Too many ways for the contractor to add in costs that don’t exist, over order materials to use elsewhere, etc.

Keep control of your deal and hire a good GC or a good project manager with good sub contacts.