How does a relationship between a investor and a contractor work

Question

I own a remodeling business and have my general contractors license. I’m interested in flipping houses in Washington State with an investor and interested in how it all works?

House cost, materials cost, my labor, interest, capital gains etc. Very keen to figure this out and get started. Any advise is hugely appreciated.

David D'Errico · Answer

its all in what you agree to together......if you are partnering with an investor then there will be a shared responsibility for different portions of the project.....what will each of you be bringing to the table......it can be 50/50, 75/25, or any variation......be sure you write everything down in a contact. Maybe He funds it and you do the work.... and split it down the middle.....hope this helped

J Scott · Answer

You're asking a very general question.  In general, it works any way you want it to work.  There is no set business or financial model for partners flipping houses.  In general, you'll want to figure out/negotiate/decide:

- Who is responsible for finding the deals

- Who is responsible for funding the deals

- Who is responsible for getting the deals renovated and ready for sale

- Who is responsible for getting the deals sold

- How the profits are split

If you're simply going to be the contractor on the deals, I would suggest he just pay you like a contractor.  If you're planning to do more than the contractor work or if you're planning to finance some/all of the deal, decide what each party is going to do and be responsible for and split the equity and profits in a way that you both agree on.