Partner profit split: one invests the money, both split the work

[Jo Ballagh]

I’m going to pose this from a 3rd person perspectIve and attempt to answer responses in the same manner so as to not give away my personal position in the situation (in hopes of receiving unemotional and unbiased feedback) Two individuals want to go into business together flipping houses. Partner A - has $50k to invest. Owns 5 rentals. Has 10 years [NON-professional] experience remodeling/basic construction. Works a full 40hr/wk job. Has currently invested $7k in pre-flipping costs (enclosed trailer for business use and membership to a flipping group for both Partner A and B). Has realtor contacts. Partner B: has $0 to invest. Has never owned a house. Has 3 years of [professional] construction and remodeling experience. Works a full 40hr/wk job. Has construction and labor contacts. Situation: Partner A and Partner B would like to start a flipping business together. A house is purchased for $150k and the down payment, remodel, holding and closing costs = $50k. Partner A covers all costs. Both partners invest equal time. House sells for $200k. Dilemma: how is the $50k split fairly? Caveat: what if Partner B finds a hard money lender (or family member) to invest $25k. Now Partner A only has to invest $25k. Same profit. Who is responsible for the hard money lender payback? What does the profit split look like in THIS situation?