Building Contract with Private Financer

[Jodi Taylor]

Hi all, 

I have a building under contract and I have an investor funding the entire project. We are both new to working with a partner and trying to figure out the dynamic for the contract/risks/etc. The initial thought was a 70/30 split (me at 30) - investor funding all the cash ($250k) while I do all the work. We both have concerns about what happens if more funds are needed, what happens if we are going to default on the loan, etc. 

Can anyone provide insight on how they usually structure these deals?

Thanks!

[Chris Seveney]

@Jodi Taylor

Those are all valid concerns and it’s not a one size fits all. You should review all the what ifs and have solutions for solving them nd what happens

If more money is needed, who has the $ to bring to the table, and if one adds what is the equity change. There is no right or wrong answer to this but you need to determine how it is rectified upfront otherwise it will lead to bad blood later