I recently met a contractor that is interested in investing in real estate, but does not have the cash to put in, however, he can offer his services so I was curious to ask some bigger pocket members, what is the best was to brokerage a flip with a contractor if anyone has experience or suggestions? What % would you go for at his end to make a win/win and long term relationship?
I've got a handyman who is doing this with some other investors. He puts in the sweat equity while the other guys have the money to purchase and finance the deals. I'm not sure what their split is.
Starting out you'll have to be extra cautious since you may not know how this contractor performs. And he'll be just as cautious of you as well. I would get everything in writing, detailed scope of works, dates at which certain projects should be completed.
Something to keep the contractor motivated would be a bonus of x% upon completion by a certain date. Or you could set it up so the contractor pays holding costs - that would certainly keep me going.
So if I am clear you basically would have him get an extra % if he finishes sooner or have him pay holding costs?
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