Partnering with a builder on a spec

2 Replies

I'm jumping into new construction south of Atlanta on a single 6 acre track. I'm looking at partnering with the builder. He has assisted me with several rehabs, so I feel like I know him well. If I provide the land and the money, Is it reasonable to expect him to provide the management and oversight on the project and split the profits 50-50 once the house sells?

Yes! That is what I have done and it seems to work well.  I had several builders look at doing this for me and two of them wanted to charge a builder management fee and split 50/50 when the home sells. I ultamatly chose the builder I trusted the most and said I would do the deal on 50/50 with no management fee.

check with your attorney. If I was putting up the money, I'd want complete control legally. What are you going to do if both of you are on the deed yet he skips out and doesn't live up to his end of the bargain? you're still going to owe him his percentage for possibly doing nothing. You have the money, then it's your job to protect that money. Consult an attorney and make sure you have all I's dotted and T's crossed.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you