Investing in a flip, help!

[Dan ODonnell]

Hey there everybody I am hoping some of you can help me out with your knowledge. I have been saving up money to invest into a property with my uncle who buys and flips condos and houses. We are at a disagreement that may hinder this from ever happening, which is not good for me. 

Say the total cost to pick up a **** condo and rehab it from start to finish is 50,000. 40,000 is his and 10,000 is mine. I put in 1/5th of the investment and should see 1/5th of the profit. Therefore I believe I should do 1/5th of the total work. If he puts in 40 hours a week of work on the condo I would put in 10 hours of work a week, because that would make 50 hours of total work being done, 10 hours being my fair share. He believes I should be doing just as much work as him. I believe that is wrong, unfair and not how an investment works. Please let me know your input.

[J Scott]

Who found the deal? 

Who negotiated with the sellers and got the contract? 

Who put down the earnest money?  

Who will be taking title to the property?  

Who will be dealing with the title company/attorneys at closing?

Who will be responsible for getting utilities turned on and paid?  

Who will be keeping the books and doing the accounting? 

Who is putting together the Scope of Work?

Who is putting together the budget?

Who is doing the design work and making the rehab decisions?

Who will primarily deal with problems/issues/emergencies when they come up?

Who will be selling (or working with the listing broker) on the back end?

Who will be responsible for negotiating the with the buyers on the back end?

Who will be dealing with all the sale tasks on the back end (inspections, appraisals, paperwork, etc)?

These are all factors that roll into the "work" that needs to be done.  Assuming your uncle is doing most of these things (as he should, if he's the experienced one), it seems reasonable that you pick up some of the slack by doing more than 20% of the rehab work.

Of course, if you're doing much of the work above, then his doing more of the rehab work is reasonable since he's getting the bulk of the profit (even if he's putting in more money).