Partnering with a GC

[Leslie Beia]

After 5 years dabbling in STR's, BRRRR's, and flips, I'm ready to focus on one area and asset class, scale up, and build a portfolio that I can eventually retire on. My cousin's fiance has a painting business and has done numerous jobs for family members over the years. He has proven himself to be a hard worker, ethical, and as it happens, he'd really love to expand his knowledge base and grow into bigger responsibilities. I feel, and he agrees, that we might be able to do some good work together.

My question is what should I be considering as I think about the structure of our working relationship? I know that I stand to make more money per renovation by just paying for the work, but I'm attracted to the idea of partnering with him for a few reasons. One, I think it would give him a greater sense of responsibility, urgency, and dedication. My GC's have been ok, but they know they are getting paid no matter what happens with the rest of the deal, and I like the idea of sharing that risk and responsibility with the person doing the work. It would also lessen my out--of-pocket on either hard money costs or cash I spend, so I'd have more to work with to acquire more properties. I also know that he'd need to grow into the position, but once he has a grip on it and a good team of subs, a partnership would mean we'd work together exclusively and I wouldn't be sharing him with a bunch of other investors!

What I'd bring to the table would be researching and sourcing properties, cash for down payments and other expenses, and design and some finishing material sourcing. He would be responsible for budgeting and managing the renovation entirely. Does this sound like a 50/50 split? Maybe after I am paid a percentage on my cash investment? I'd love thoughts and advice from folks who have done it this way, thank you!