Anyone partner with an agent and contractor?

[Joseph L.]

Hey guys,

I couldn't find any post similar to this topic.

Basically I have been approached by an agent and a contractor to partner up with. They both have outlined a basic split but wasn't sure if this is fair for all or if anyone has done it before and ifnit was a terrible idea or it worked well. I would do it on my own but I lack the cash and I would like to spread the risk just in case as it will be my first one.

Capital:
Me - 60%
agent - 20%
contractor -20%

The agent and I will decide on the property and then he will sell it. The contractor will do all the work needed on the house. (we are not looking for any "big" jobs such as roofing foundation work. ) I've seen his work and he can flooring remodel kitchen/bathrooms and such.

The thing is he wants to get paid for his work. He said he will take much less than usual but he needs income to live on. So we wouldn't have to pay any extra for material and labor will be cheaper than normal.

Is this normal for people who have partnered up with contractors?

I want to consider bringing him on as a partner bc I work full time and wouldn't be able to be at the property during the day. Do you guys go to yourvproperty and check on it daily? Or just check on it when their work is suppose to be done? He said he would be willing to work for cheap to keep our expenses down in order to see a nice profit.

I think it's fair to split on capital % and they agree.

Now the agent, he would not be getting his commission from selling the house and then his profit split but we would include the amount in the profits so we equally get our %of profit. But he said he might want the commissions from the front end buying the house. I will suggest that this should be included in the profits as besides the contractor me and him shouldnt get paid for any work and just make money if the property sells for a profit.

I really need everyone's cash on this deal as I don't have the money/expertise or balls to go at it alone for the first one. Nor do I want to lose all the money Ive been saving so I would rather make a lot less by sharing the reward/risk.

What do I bring you might ask? No one has done one on their own. The contractor has fixed properties for other people who flip so he would be counting on my accounting/business background to make sure the #s work. And also I have the most cash to put up. I guess I can myself the supervisor?

Thanks for any comments you can provide as I want to plan as much as possible before starting.

Joe