Rehabbing, Flipping, and Rentals with multiple equity partners

[Megan Broom]

My partner and I both began as real estate agents and got into the investing world. Our current equity partners were our originally clients. After building trust and close relationships with several, we have gotten to the point were they have given us access to more capital than we can even manage at this time.

Because we were transitioning from being the agent, we began using profit sharing agreements. Their LLC was used to purchase and sell, and we get paid 50% of the profit.

We began with foreclosure condos and now we are getting into rehabbing homes. We have one house under contract and another is being rehabbed currently. Because we had so much capital given to us without having an entire investment business set up, things have gotten quite overwhelming. I am currently trying to build an operations manual and create more efficient ways of handling our business.

Is it best to use our investment company to purchase and have a deed in trust/primary lien for the equity partner? They put up 100% of the money for every expense. On our first rehab, we have had many trips to home depot, receipts etc and it's been a nightmare! We have bought these items (or sometimes our GC has, and we paid him with a check from our company) then we have given the equity partner invoices and copies of the receipts to reimburse us a few times per month. I know this is extremely inefficient, but at the time, it was the only way to get it done. So, in the future, what is the best way to structure the arrangement if the equity partner is going to put up the money for rehab costs?

We will also be buying some properties to fix up to rental standards for cashflow. Do we need different arrangements with our equity partners than with short term flips?

Is anyone hiring assistants as independent contractors for a short period before employing them full time?

I am looking into Quickbooks but am concerned that it is very complicated to set up.

Sorry this is so long - I just am trying to be as clear as possible because our situation is a little different than most.

I have learned a lot from bigger pockets and especially J Scott's blogs/website. Thanks for all the advice and information!