My contractor wants to be my competition - HELP!

[Roman Pak]

So maybe I'm overreacting, but I need to know what my fellow BP members have to say. Here's the story.  I'm working on my first flip, I chose to use my friend and contractor of 18 years, to do the rehab. Today as we're talking, he mentions that he's found a partner and will begin flipping properties with that partner in the near future, here's what has me concerned, his partner is the owner of a bank nearby and has much more capital and connections than I do, not to mention the ability to get financing in any amount. My friend/contractor said he got a list of 27 properties from this guy that he wants looked at and he's willing to buy multiple at a time. 

My first reaction was, no big deal, a guy with that much cash will be playing with much larger and more expensive properties... Or so I thought. As our conversation continued I found out that this investor wants to essentially mine the same ground as me and he's looking at the exact same types of properties that i would be looking for. 100-200k. 

I want to grow my flipping business, but I'm pretty sure I won't be able to compete with someone like that, secondly, my contractor is essentially becoming my competition and will most likely not have the time to rehab my properties if he's making 50% with his other partner. Needless to say I'm majorly bummed and don't really know how to handle this situation.