Partnering with a General Contractor

[Sean Brennan]

I just read a nice blog by Mike LaCava about flipping houses:

http://www.biggerpockets.com/renewsblog/2013/02/03/flipping-houses-with-no-money/

I found the idea of partnering with a General Contractor very appealing. Perhaps I could find a deal, put up some of the money and get a general contractor as an equity partner. I think this would be great because I have no construction experience and would love a highly motivated GC on my side.

Has anyone done this or have any ideas on how a deal like this could be structured?

[Mike LaCava]

Lets start off with your ARV of 270k. Using the 70% rule you should be buying this around 189k minus repair cost. Your acquisition cost & rehab total you figured at $240 is way to high for $270 sell price. You should project $54k profit. Ok now on the split - You bring the money in at cost for acquisition & the contractor depending on his financial situation can provide materials & labor at cost. You split the net profit 50/50. There are many variable in this situation depending on both partners financial situation. You can get up to 95% financing with hard money in some cases but the rate will be way high but it is an option if the #'s work.