contractor/ investor relationship

[Ian Gumpel]

Hello, I am contractor who has just recently entered a partnership with two other parties. One has the money and the other as the credit/ borrowing power. We are looking to execute the BRRR strategy together. I am trying to find a good way to arrange our first deal with an equitable distribution of profits. As an S-corp my thought is the three of us will share/ retain 20% of the equity upon refinancing as well as collect the net profit brought in from our rental. A mentor of mine suggested that as the contractor come up with a with a construction estimate/schedule for the project and we could proceed like this... Construction $120K retail market price As the contractor I believe I can execute this project for $67k our company could hire another contractor for $120k to do this project. My proposal is that I come in at 20% below market = Construction cost of $96k and I collect the $29,000 difference upon refinancing. Any thoughts and advice you have is greatly appreciated! I am just starting out with this and simply want to go about it in the best way possible to make sure my partners and I can be successful. best, Ian