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Updated over 10 years ago on . Most recent reply

User Stats

65
Posts
9
Votes
Gregory Tran
  • Involved In Real Estate
  • Austin, TX
9
Votes |
65
Posts

How to partner with a builder/contractor on a rehab

Gregory Tran
  • Involved In Real Estate
  • Austin, TX
Posted

There is a property I think would be a good rehab candidate, but I'm wondering if anyone has partnered with a builder or contractor on something like that (this would be my first flip, and even if I gave some money up it might be worth it to have someone who really knows what they're doing on the rehab side on the team)

Option 1:  I buy the house, pay the architect/builder retail, I sell the house

Option 2:  I buy the house, partner somehow, we split the profits 50/50. (In a situation like this, can I assume that they wouldn't charge the markup for architecture and builder's markup?  I wouldn't be charging my listing agent fee.  We'd be splitting the profit anyways right?)

Option 3:  We set up some sort of entity, buy the property 50/50, and split costs and the profit.  Is that feasible?  

Now that I type it out, option 1 sounds the cleanest with more risk, while option 3 is on the other side of the spectrum, though in that one the builder would have an interest in keeping costs down.  What do you guys think?

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