Taking on a contractor as a investment partner

[Franky Aikens]

Hello BP!

I may have an opportunity to take on a contractor as an investment partner.  His business acumen is great and he doesn't really good work. On paper, it seems like it would be a great idea. Just kicking the tires on the idea as of right now and haven't really conceptualized what the partnership structure would look like.

Wondering what everyone's thoughts are on having a contractor as an investment partner.  

What are the pros and cons and would this be something to seriously consider?

[Frank Geiger]

Start very small. From the moment you begin a partnership like this, it will be tested. Make sure to clearly define how/when the contractor gets paid. Do they come to the deal with cash or make it on the back end? Who pays for the construction costs (labor and material)? Who has ownership/authority of project timelines? Who pays if the project runs over budget? Having an open dialogue about any problems that may arise, responsibilities of each member, etc, will make or break the partnership.