New construction flip deal deep dive - would you do this deal?

[Peter Ricca]

Hi BP -- quirky story and interesting/potentially lucrative opportunity. 

My lender introduced me to a semi-retired local builder, who 70 years old and has built/sold over 3,000 homes in my state. 

I took him to lunch yesterday to pick his brain and we got along really well (super nice guy), so much so that he wants to do a deal with me. We drove around his town and viewed an empty buildable lot for sale. His idea is that I purchase the lot contingent on a building permit, while we get the permit approved, we market his pre-made home drawing/plans on Zillow, find a buyer and execute a contract for sale on the new home build before I even close on the land. He would then GC's the build funded by a construction loan I take out, we close once finished, split the profit 50/50 (he's trusting me to pay him his cut, even though the whole deal is in my name). 

Deal Breakdown:

Lot Cost = $110,000 (cash, we split this cost)

Estimated all-in build cost for 3,600 sq ft SF home  = $350,000

After construction value = $585,000-650,000 depending (our market is really hot right now in NJ so it's fairly likely we get it under contract quickly) 

Potential Profit = $125-190K (less taxes and lender fees of course)

Sounds too go to be true -- here are my concerns: 

1. The builder is in poor health, he's not very mobile and has in home medical care (he can still drive and go to job sites, but is he is very physically limited). His mind is very sharp though. 

2. Division of labor -- I am relying 100% on his health staying good enough to GC this job start to finish. I work a regular W2 job and cannot be on the job site daily (plus I have no experience home building). My job here is to market the property to buyers and then manage the tranche payments from the construction lender to his subs. 

3. I will have access to his subs, and will be involved in the job as much as I can (marketing the home, finding prospective buyers), but if his health fails I'll be left without someone to overwatch and get this house built to completion.

I'm sure I could find a Project Manager in a pinch and offer to split some profit with him. 

Would you guys do this deal? What sort of safety measures would you undergo to make sure I can execute if things go south?

Thanks!

- Peter