What return should I ask for?

[Alex Matthews]

Hello all!  I hope this is in the right category. Most of my question is in the description. An agent that I have done several listings and purchases through is starting to flip and has come across a pretty nice deal. They are asking me to fund about 90% of the whole deal and are offering me a 25% return on my investment. They are not asking me to do any of the work. I would own the property. The timeline will be lengthy (approx 7-8 months) as there is currently a tenant. The agent/flipper will be doing a lot of the work seeing as how they have some experience flipping their personal residence a few times. I was told this would be the agent/flipper's only focus until completion. This would be considered a large project for either of our real estate experience.

I only have experience doing a few flips on my own and have never been in this position before. I am nervous because I seem to be carrying the majority of the risk. I was hoping the bigger pockets family could give me a few suggestions, instances, warnings, or any general guidance as to how I should approach this or to where I might be able to educate myself some more on this aspect of investing. 

I'm not sure of how much I should be asking for as a return or if I should be asking for a percentage of the profits (as it may be substantial) and how/if I can protect myself of any possible negative outcomes.

Thank you for taking the time to read this and many thanks for any replies.

[Allan Smith]

If you are taking ownership of the property you are absolutely sharing profit. 50% would be about right. If they are giving you a 25% return and you are not the owner, then you should have a lien on the property and loan documents with the flipper. They are trying to give you all the risk without a fair chunk of profit.

[Alex Matthews]

Originally posted by @Allan Smith:

If you are taking ownership of the property you are absolutely sharing profit. 50% would be about right. If they are giving you a 25% return and you are not the owner, then you should have a lien on the property and loan documents with the flipper. They are trying to give you all the risk without a fair chunk of profit.

Thanks Allan! I was thinking that the sharing of the profits may be the way to go. I appreciate your input.