Did I get screwed on this flip?

[Brian Sheen]

Evening folks! New to the forum and new to the flipping industry! However, not new to contracting.

I'm looking for a third unbiased party to help me decide whether i got screwed or not screwed.  Post might be long...

I will first start off by saying this has been a learning experience! And i knew going in that I'd learn. 

I recently partnered with a relative on a flip project.  He was the financial backer and i was the GC. He provided funds for the purchase, materials, and some helping hand labor(retired state worker with 0 experience) .  While i  (contractor/business owner of 15yrs)provided the experienced labor and also took care of the entire design of the project and researching/picking out the materials used. 

Although we did hire the siding, drywall and plumbing, I handled everything else. We did high end finishes including custom vanities, custom kitchen, tiled showers etc all built by myself. 

Here are the details: 

House- 3008sf, 4+ stall garage, 20x40 pool, 4 bed, 2 full 2 half bath.

The deal: 55%/45% in my favor of the profits. 

Purchase price was $127k with fees. Reno cost of materials and outside sub contractors was $113k for a total of $240k. Reno took 33 weeks off which he took 4 weeks off. I averaged 56 hours per week. My wife and 3 kids actually ended up working and provided an additional $12k worth of labor that i would end up taking out of my profits because he was paying his son out of his.

We sold the house for full asking price of $360k minus realtor commissions of $19,800. Note i was told what the house was going to be listed for, i had no input. He had discussed with our realtor. This essentially gives us a profit of $100k or $55k and $45 respectively. 

Now i realize some of this is my emotions coming out, so don't take it as arrogance, but the quality of work that was provided was top notch.  Not an average quick flip and get out.

As i write this i think of so many other details that should have been worked out.

Anyway, i realize that we agreed on the 55/45 split, which at my normal billing rate this doesn't come close to, however should i have negotiated getting 45 percent of the additional labor back as well as i repay 55%of his sons labor to him?

[Thomas S.]

No you did not get screwed, you simply did not make as much as you might have hoped. No surprise as it was your first flip and often that is how it goes. Making a normal hourly rate is not expected which is why you should sub out the majority of work and turn a flip in under 3 months. In and out, time is money and you make it on multiple small flips in quick succession. You worked too slow and it ultimately cost you.

He was the money , you were the labour, that is the way it worked out so no issues there.