Structuring First Rehab

[Brett Bumgarner]

I know there are quite a few ways to structure a deal when it comes to rehabbing a house but I wanted to get some opinions. I want to partner up with a friend who owns a construction company and as experience rehabbing homes to flip. He doesn't want to use his crew (higher end carpenters) to do the work so we will be finding subcontractors. He doesn't have very good credit and doesn't have a lot to put down on the deal. I on the other hand do not have the rehabbing experience but have the cash and credit to fund the deal.

We both decided to flip a couple of house first to see how it goes before we establish a business entity together. So, the question is, if he is going to be managing the crew and the day to day issues and I am funding the deal, what's the most fair way to do this? Should it be 50/50 profit split? Should I put him on title? Should I have his co-sign on the loan so he has skin in the game? Do we need to have some legal document in place to define how profits or losses are to be split? Any advice would be greatly appreciated.