Partnering on a big flip

[Justin Lee Taylor]

Starting my first flip. ARV is 190,000. Got the house for 100,000. Rehab estimate is about 30,000 if i pay a contractor. I had a contractor walk the property and said material cost is about 10-15,000. I plan to live in the property with a friend and we are going to rehab ourself and then resale. Is there any advice on partnering with someone as far as being on the same page. I trust the guy and we have been good friends for a while. We are just trying to play it safe and plan ahead of time. Any advice on partnering?

[Will Fraser]

Hi @Justin Lee Taylor! You've asked an important question here.  You will want to be on the same page before you start living together and ripping together.  I would encourage you two to sit down and talk about what you would like be true of this property (in 1 year, 5 years, etc) and make sure that you both thinking of the objective as the same.  How soon will you sell the property?  How will you divide the proceeds?  How will you determine what work to do in order to achieve the highest resale value?  How will you decide on an agent?  Who will purchase the materials needed for the work?  Who will do what during the rehab?  

The more granular you get during this phase, the easier it will be to roll through the stressful steps of the rehab together with harmony.

Another added benefit of this is that you'll begin to see if this is destined to be a "one-off" partnership or a "rinse and repeat" partnership, which will largely be determined by whether or not the two of you see the world in the same way.