Setting up a flip & fix partnership

[Phil B.]

I’m a licensed broker associate and am fortunate to be working with a client/investor who will be fully funding fix flip deals with me. I am wondering what’s the best setup so each of our duties are clearly outlined and for accounting purposes. Investor is the bank and I’m doing the flips, any profits would be split.

What kind of formal agreements should we have?

Should everything go in an LLC?

Does the home title in investors name? LLC's?

I’m not concerned about the first or second flip per se but as an ongoing venture, I’d like to know how to set things up correctly to build a solid foundation as a real business.

[Anthony Dadlani]

@Phil B.

There are various ways you can accomplish this. 

1. Setup a joint LLC with both of you as partners.

2. Set up a profit sharing agreement by property 

We prefer the latter as then our entities are not tied in case a test deal does not work out. 

Best of luck in all your endeavors.