Newbie from Cincinnati, OH- Ready to get off the sidelines

[Sarah Brown]

My brother flips/rents full-time and I have been helping him on the administrative side of things-- managing his leases, finding properties, etc.  My husband and I are interested in real estate and have 100k that we can put towards it.  My brother is a great resource but we will be looking in a different part of town and we don't want to wear him out with questions so I have been spending lots of time on BP and listening to podcasts.  My husband works full time and I stay at home so most of my free time is from home when kids are sleeping.  

My first question is about doing our first flip as a partnership with my in-laws.  We have the cash but lack the time to do the renovation work.  My father in-law wants to do the work and is wanting to do this more full time when he retires in a few years.  That said... how do we go about determining how to split our profits and what do we need to be sure is discussed before starting?

We would buy the house and cover the renovation costs, as well as find the house, negotiate, list the house, etc.  My father in-law would be in charge of doing the work or hiring out anything he can't handle.  How would you recommend splitting profits?  Any advice is appreciated!

[Paul Sian]

I have a deal with a friend where I front the funds to buy the property and he will do all the work like carpentry, carpet flooring etc. Things where we might need a pro we would hire out and I would pay.  My agreement with him is to pay half of profits after all expenses have been taken care of. 

Even though they are your in laws I would recommend some sort of LLC and operating agreement. One for each of you. An easy excuse to any hesitation is it is for tax purposes.