How to help friend rehab and sell his house

[Michael Clark]

My friend wants to sell his house, he's lived in it for over 10 years and he has equity but it needs a lot of work. He wants me to loan him the money for the rehab and take the lead managing the project then we split the profits. What's the best way to structure this so everybody wins?

[Greg R.]

Are you a contractor, or why would your friend offer this deal to you? Is it because you have the cash necessary to do the rehab? 

Sounds like a lot of risk from my point of view. The only advice I would offer is to get an attorney to form an agreement. Do not proceed with a hand shake agreement. Otherwise you might fund his rehab, be his GC, and get left with nothing. 

I'd also be very skeptical about the declining market and the recession we just entered. Home values are already starting to fall, who knows where they'll be when you finish the renovation.