New member from Wisconsin with creative idea to get in the game

[Brice Lorenz]

Hello Everyone,

New inspiring investor here in the stages of gaining education.  I have a unique creative way for me to gain equity in some deals.  Curious on everyone's opinion on if this could or could not work...

I own and run a Concrete company where we place and fix various, patios, driveways, sidewalks etc..  What I'm thinking (please correct me if I'm wrong) is that instead of charging for my service/product, I apply that towards overall capital used for flip/remodel etc.  Let me explain in real world scenario..

Joe investor has a single family house he picked up on the cheap and is doing a remodel in hopes of a good profit from the flip.  His purchase price is 50k on the house, he spends another 20k on remodel and 10k on a new concrete driveway.

Total invested: 50,000 purchase 30,000 improvements (10,000 for driveway).. 

Let's say I don't charge him directly and we apply my cost towards Money spent on his repairs.

I.e. He spends 70,000 and I "spend" 10,000 giving me a pre agreed upon equity stake of 12.5%.  

So house Appraises and sells for asking price of 100k which equals a 20,000 dollar profit to which I'm entitled 12.5%. Giving me $2,500 which is a cash on cash return from my original 10k of 25%.  That percentage could be higher considering my service is "valued" at that amount but does not actually cost me out of pocket 10k. I can make a win win win for everyone involved.  

Possible issues: protecting customer against what they think is a high job value = I would have them get three other bids and then do the average of both if feasible.  

Buy and hold deals would have to be structured another way to make it make sense for all involved.

What does everyone think???

I'm open to all criticism or praise. That's the only way we better our ideas