Need Advice: Partnering with a General Contractor

[Steve Sebree]

My wife and I have just recently been in discussions with a GC in North Phoenix regarding a partnership opportunity on a fix-and-flip. It's a long story, but to quickly summarize my wife and I purchased the home and will be closing on it soon. The GC is very interested in partnering with us on this deal, but we've never done this before and are unsure of the pitfalls we might be approaching. We do not currently have any sort of agreement in place. Here are some of our specific questions/comments/concerns about partnering with a GC. Please feel free to respond to any/all of them, along with other pieces of advice you can share:

- Even though the house is in me and my wife's name, we don't want to maintain liability and are considering rolling this project into an LLC. The GC wants to be a part of the LLC (and do the work at cost), however, we don't want to give up part ownership to the GC. We're trying to figure out the best way to create a partnership of some kind without handing over ownership of the property. We've already discussed a JV with the GC, but perhaps there's a way to write a contract that allows the GC to take 50% of the profits while we maintain ownership (and take the other 50%).

- Me and my wife's plan is to continue investing in real estate opportunities and see this GC as a possible opportunity to make our lives a little easier by not having to do the work ourselves. Even though we lose some profit margins, it's a much better option since we both have day jobs. Currently, my part is to find the properties with potential, put in an offer, close the deal and take out the mortgage for the project. The contractor's sole responsibility is ensuring the house is rehabbed on time and within budget. In your opinion, is this is a fair split of effort to share 50% of the profits?

- If you know of a mutually binding agreements, either for a JV or for profit sharing, I'd appreciate you sending me the link or sending me the document directly.

Any other advice or suggestions you can provide would be greatly appreciated.

Thank you!