Need opinions on investment

[Dan ODonnell]

Hey there everybody I am hoping some of you can help me out with your knowledge. I have been saving up money to invest into a property with my uncle who buys and flips condos and houses. We are at a disagreement that may hinder this from ever happening, which is not good for me. 

Say the total cost to pick up a **** condo and rehab it from start to finish is 50,000. 40,000 is his and 10,000 is mine. I put in 1/5th of the investment and should see 1/5th of the profit. Therefore I believe I should do 1/5th of the total work. If he puts in 40 hours a week of work on the condo I would put in 10 hours of work a week, because that would make 50 hours of total work being done, 10 hours being my fair share. He believes I should be doing just as much work as him. I believe that is wrong, unfair and not how an investment works. Please let me know your input.

[Isaac Blocher]

"And if anyone forces you to go one mile, go with him two miles." Mathew 5:41

@Dan ODonnell It sounds like your Uncle is helping you out. This is a business relationship but it is also so much more. He is training you, helping you, leading you. If I were you, I would be grateful for his help. So as Matt. 5:41 say, Go the extra mile and work harder, longer, and more fervently then your Uncle. Impress him with your work. 

But don't just have a working attitude on the out side and a angry attitude on the inside. Make sure you have changed your mind about working in this project. If you don't change your thinking, the extra work will mean nothing and your Uncle will see right through it. 

[Ned Carey]

From your post is sounds like he has the experience and you don't.  That experience has value. Presuming that is the case I wouldn't work with you if you didn't value my experience. 

[Paul Timmins]

@Dan ODonnell

Welcome. You have received some good advice. Fill out your profile, remember you pay for your learnings one way or another. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul 

[Peter Amour]

if it were me , i would be putting up my hard cash ( more at risk ) and would expect you to do same amount of work . i have a partner on a number of places and sometimes i put up all the cash , till he sells or refi's .... he realizes that he sometimes he does a bit more ( i am gone about 30-40% of winter ) thats how most deals i know of work , but that does't mean its that way 100% , just my two cents :)

good luck , i would go for it , you could never pay for the experience you will be getting , i am sure of that .

[Karen O.]

I agree with previous posters.  The training you'll get from an experienced uncle is invaluable.  And with time, you'll become more valuable to the whole operation.  In the end, this isn't worth hindering your relationship with your uncle over.  You don't realize how valuable the perspective of one who has done it is.  So many of us out here are still trying to find someone to show us the ropes and teach us the game all while trying not to get taken or learn bad habits.  

Consider giving uncle a bigger piece of the pie because you really aren't equals.  Also consider crunching the #s and see if he'll agree to a flat % return on your investment. This way you'll know exactly what you'll get on the other end.  And you can contribute as much time and energy as is needed to increase your knowledge.  

In the end, if your uncle sees you gaining knowledge and skills and becoming important to a successful operation, he'll likely be more willing to split a deal with you as time goes forward.    

[Brandon Battle]

Are you talking about manual labor? You mean if your uncle says it is going to take 5 hours to paint the kitchen and dining room you're just gonna paint for an hour and abandon him to do the rest while you go home and chug a beer? If that's the case your partnership needs to end before it begins.Please correct me now and tell me I am dead wrong,please!!! 

[Dan ODonnell]

Thank you to everyone that has responded you have all put this into perspective for me. I realize now that not only will I be gaining experience but working just as much as him will increase our total profit or at the very least allow us to finish the project faster and move onto another. I am meeting with him tomorrow to discuss everything. 

I have made the decision to move forward with the project with a more hard working attitude. I do have one final question for you all. As he has been doing this for a long time, he has an employee who works with him. This employee will be helping us on the project as it wouldnt be right to let him go because he is including me in this project. Plus it would help us finish and sell faster. Since I would theoretically be a 1/5th investor, this employee would be 1/5th mine as his pay is calculated into the total cost of our investment. My question is my Uncle tends to send him on personal errands throughout the day, which has no benefit for me but is still technically coming from my pay. I dont want to nitpick but I also dont want to let this be a regualr thing. Why would I partially pay an employee to do my uncles/partners personal errands?