Flipping partnership set-up

[Joseph Belgrad]

I'm entering into a partnership with a wholesaler for flipping houses. Our target is turn-key properties needing very minimal, if any, work. For example, he has located a property that negotiating with the owner he can get for 310. He already has a buyer agent and buyer lined up that want to buy for 365. The wholesaler does not have access to any financing. We want to create a partnership in which he adds 100% sweat equity, and I add 100% financing. What would be the best way to structure this?

My thoughts are to create an LLC with us as 50/50 equity stake.

Initial LLC creation cost (~$1000 here in Massachusetts) is split evenly

I would then do a 0% interest mortgage for financing the LLC. He then would do all the paperwork to make it go through as well as take care of any work that needed to be done to the property. Profits split 50/50.

Have a clause that if any work needs to be done to the property then additional loan money would be given at interest (not sure what a good amount would be).

Disputes would be handled through mediation, followed by arbitration.

If someone wants to leave they have to buy out the other person's equity/debt. 

He finds the deals and sets the terms of the deal with the other people involved with the deal. I either approve or deny moving forward with the deal.

In the case of one partner dying, assets are sold off, debts are settled, remaining profits are split 50/50 between surviving partner and dead partner's estate/closest kin. Losses are cut. 

Dissolution optional after any flip. 

What do you think? What should be added/removed. What seems too skewed one way or the other? Of course I'm going to have a lawyer look over and draft a formal agreement, but just want to get as much of an idea as we can before sending to a lawyer to minimize legal fees.