Help with Joint Venture Partnership

[Emily Arras]

Any help or suggestions would be greatly appreciated.  What we have proposed is this:

Our company supplies the money for the deal, thus the majority of the risk.  We are planning on a Hard Money loan, have some personal capital we can use as a down payment but may take out a personal loan instead.  If we provide down payment with our own cash, we were going to charge interest for the down payment to the job.  We have experience doing flips of our own that we have lived in and sold.

 We are not currently living in the area where the flip would occur, so we have friends who would manage the contractors and reno.  They have their own company with a background in flooring and have done some demo, no actual flipping experience.  Our proposal to them is that they would manage the project, any work they did on the home such as flooring and/or demo, we would pay them for that work as we would a regular contractor.

We would split the profits 50/50.

Is this fair?  Particularly that we would be charging interest on money we loan for the job, and that we would pay them for the work they did on the home.