Structuring a Partnership for Flips

[Adam Kersten]

I'm wondering how to go about structuring a partnership. I don't need a partner to invest, but I have someone who would like to invest with me and he can do a lot of the small rehab things himself.  I am more the financial guy and am a Realtor.  I can invest solo but would preferably contract everything out because I'm not nearly as skilled to do it myself.  I could probably save some money partnering with this guy...but probably only on flips?!

Anyone else partner out there with a person who does most of the handywork?  How do you structure your partnership and how do you handle cost of materials, labor (since he would be directly doing way more labor than me), exit costs (I can save money on commissions, etc.)?

[Evan Polaski]

One of my friends did this with his uncle.  He was the money, his uncle was the contractor.  Their deal was: Uncle would "bid" the project for labor at normal rates.  Here is simplified example:
Purchase Price: $100k
Material Price:   $50k
Labor:               $50k
Total:              $200k

Uncle works for free, then recoups his $50k on sale and takes 25% of profit as his profit for working for free.