Is this partnership agreement fair?

[Sam Fickel]

Okay, this is in the suuuuper early stages and I don't know what I'm doing yet, but I wanted to get y'alls general thoughts.

I have some money, and I met a flipper that needs money. I don't have enough for the full deal, but enough for the 10% down payment on a hard money loan. 

The flipper is thinking a 70/30 split of the profits after paying back the money I put into the deal (down payment, closing costs, and rehab) would be fair. 

The flipper will do all the work in around ~3 months, including finding the deal, negotiating, managing the rehab, and all that jazz. Since I work with realtors so much, I bet I could do the listing myself, but still will probably hire a listing agent. 

He assures me that he'll be profiting $50k on every deal. So I'd make $6600 by doing next to nothing. 

Also, important detail: I'm new to this world and don't know what to look for when analyzing a deal someone is bringing me - but I know the hard money lender is. Meaning, I can lean on the fact that if they're going to give a green light for the deal, then why shouldn't I? 

I'll still ask for the information he presents to the other lender so I can learn, but this way, I can learn without as much risk. 

So is this 70/30 split fair? 

[Evan Polaski]

If that seems fair to you than yes it is a fair deal.  You are putting in 10% of the overall budget, he does all the work.  Who secures the loan?  Who's signing the personal guarantee?  How experienced is this flipper?  Does he have his own team of subs or does he use a general contractor that is making their profit as well?  Three months is a fairly short window, especially with all the supply chain issues. What happens to profits when it goes 3-6 months over projected timeline?  How much profit is left?  

Also, if he profits $50k every deal, and you get 30%, how come you only make $6,600?  30% of 50k is 15K.

Lastly, how much capital are you talking about?  What is that 10% down?  And who is paying the points and holding the reserves required to secure the loan?  Who is paying the carrying costs for those 3+ months?