Partnership contract options

[Ryan James]

New investor with possible partner option. Possible partner is a contractor who will be working my latest deal if I can get purchased out of foreclosure. He also has flipped and recently purchased his first rental. His loan officer shared an off market deal and he approached me on partnership. Wondering what is best for agreements if I put up funding and he provides labor. What type of splits or advice where we’re both protected and compensated appropriately. Appreciate it.

[John Corey]

Best? Hard to say.

Think of it this way ...

You and the contractor die a horrible death. Together in a pickup. 

Your estate and his estate are trying to pick up the pieces. Are the documents clear on who is responsible for what and what each party owns (percentage of the deal, etc)?

Or, one of you faces divorce, is disabled, or get sued for something unrelated. Wil the agreement allow the other side exit cleanly and finish what needs to be done?

A JV agreement is rarely need when everyone is happy and on the same page. It becomes critical when it becomes clear the two sides are not on the same page.