Investing with contractors

[Ben Ahrens]

I am interested in developing new apartment complexes (8plex or smaller for now). Key contractors on the job would be receiving equity and correlating cashflow instead of payment for their labor. I plan on working it similar to a syndication: I would be the general partner with my contractors being investors. I would therefore have control over the property and how it is managed, even though we would all have an equity stake in it. To summarize, the process would have two phases: 1) Construction phase, 2) Management stage. I think...During stage 1, the laborers' money would be set aside in an account until completion. Then, upon stage 2 (completion), the money in these accounts would be invested into the property, which would be applied to the principle of the mortgage.

Legally speaking, what would this type of relationship be called? I don't think a "Syndication" would work because my limited partners would not meet the criteria of an investor. Is there another type of legal partnership that would work for this dynamic?

Also, what type of lawyer should I talk to? If you're lawyer, reach out to me!