General Contractor - 50/50 split?

[Eric Clement]

Had a meeting today with a broker/attorney and a general contractor for a house flip. The idea is for a 50/50 split on the net profits between myself(capital investor) and general contractor. I would pay acquisition and materials cost upfront, the broker/attorney finds and analyzes the deal (makes6-8%), contractor estimates all rehab costs & takes on labor risk but makes 50%. This setup is very hands off for me, but I take a majority financial risk and lose a large profit margin due to the contracting partner’s share. I agree with a win-win scenario for all parties.

Can anyone provide me with insights into the following: 1. Is a legal structure required and if so which is the best for this partnership? 2. Is this generally a good arrangement considering I have zero real estate investing experience (been educating myself through BiggerPockets materials)? 3. Any pitfalls or major concerns you can share would be extremely valuable.

Lastly, the broker is recommending a minimum cash on hand amount of $150,000.

Thoughts?