All Forum Posts by: Gary T.

Thank you Joshua.  To put it plainly, I value his influence in the local circles and his connections throughout town.  I do agree that some form of loan based on my properties equity and simply hire him as GC might be the superior way to build relationships and go from there. 

I have always wondered how these type of partnerships can align the interest of the investor and the general contractor because they have opposite incentives to keep the cost down or drive the cost up.  (Even with split equity).  

Hello,

Very new to real estate and new with flipping houses. I have set my eyes on a 950k Property that needs around 500k worth of rehab and project ARV of 2.1-2.2M. The contractor in particular that I have been talking to is a strong local player with connections throughout the town. I value his expertise and definitely value his local presence. I can purchase the property with all cash but I wouldn't have enough to fund the rehab. I was thinking of partnering up with him and do an equity split. I would receive the rehab project cost from him and he will self-fund the rehab and we will split the equity based on capital injected. So in this case he will have injected roughly 35% of the capital and would receive 35% of the profit after sale. I was hoping the fact that he can make money from the job itself as he normally would and the equity afterwards would attract him into partnership with me. Another option is to take out home equity loans against my property to fund it but since my LLC is new I am expecting close to 6% financing. Any thoughts would be appreciated.