How to split profit: First time flipper

[Kristen Neuwirth]

I’m buying my first flip. I have the money but not a ton of connections or knowledge of construction trades. I have a guy who’s in the business who offered to supply labor and marketing for a 50/50 split of profit if I finance 100%. How good or bad of a deal is that? What’s the typical investor/contractor split?

[J Scott]

I would never give a percentage of the profits to someone for doing the contracting work.

What happens if he gets sick and you have to find another contractor?  What happens if his quality isn't up to par and you want to replace him?

He's a contractor -- pay him like a contractor.  If he's willing to push off collecting his payment, perhaps offer him a bonus or a higher markup.

But, don't offer a percentage of the equity, as you will find yourself in a bad situation should you have to bring in another contractor for any reason.