question about being an uneven partner in a flip

[Corey Demuth]

Theoretical question for the experts:

One party owns a property and wants to do some improvements and then attempt to flip it for a profit. However, that person does not have the capital on hand to do the improvements. Another party may be willing to provide the capital for the improvements, in exchange for a small percentage of the profits upon sale of the property. If both parties agree to this arrangement, what needs to be done legally and for tax purposes?

[Bill Walston]

Corey, a Joint Venture Agreement would cover this situation quite nicely. A JV is for a specified period of time, or for a specific project in contrast to a partnership, which is usually an on-going business. Most of the advantages AND disadvantages of partnerships apply equally to JVs. You should consult a good real estate attorney and have him draw up or review your JV Agreement.