Flipping With a Contractor

[Brady Hurs]

I've never flipped before. My brother-in-law is a talented, trustworthy contractor. We talked about flipping together, me handling the finances, and him doing the rehab. 

Has anyone had this arrangement before? If so, how did you split up the sale of the property? Was there a contract drawn up? Lawyer involved? Other best practices?

[J Scott]

Hypothetical question:  If you're half-way through the project and things aren't going well with the rehab -- for example, your brother-in-law isn't getting things done, the quality of his work isn't good or he gets hurt and can't finish the job -- are you going to be willing to fire him?  If so, how will that impact the equity split and how will you ensure that you both get a fair return after bringing in a new contractor.

Go have this discussion with your brother-in-law and see if you can come to an agreement on how it would be handled.

If you can't come to agreement on that (for example, either of you refuses to accept a scenario where you'd have to find a new contractor, this isn't someone you should be partnering with in this capacity.