How to Split profit on Flips

[Dalton Dellinger]

Hello BP,

I have two questions, but the first one will need some explaining.

I am on my second house I'm flipping in Southwestern Indiana. During the first project, I elected one of my handymen with a background in Construction Management (he has a college degree in it) to basically be my foreman. I would ultimately call the shots and make decisions but he would run the crew when I couldn't be there. We both have full-time jobs but work opposite schedules. I did about 50% of the labor myself, he and our crews/subs did the rest.

After the project was completed and listed, I came up with the idea to start our own construction company and do jobs for hire while we're between flips or if we had multiple crews. My plan is to use our construction company to do all the labor on my own flips. We are 50-50 owners of the construction company . He wants to get into the business side and do his own flips, but he simply doesn't have the education or the resources yet.

On this second flip, as kind of a "thank you" for his help on the last house, I offered him a 40% ownership. My investment company found the private financing, found the deal, got it under contract, did our due diligence and analysis. His role is to handle the entire project from start to finish. Ideally, I will only have to physically be at the house if I feel like doing some work.

My first question is: Is this a fair split or should I be offering more? Less? Other forum posts I read said that if a GC is only acting as a GC and not bringing any other value to the table, then pay them like a GC. What are your thoughts in my situation?

My second question is: if I were to split profits with a financial partner, what would be a common split? 50-50? 70-30? He (different person from question #1) would be a silent partner and just put up money. I would handle the entire project myself.

Sorry for the long and confusing post! Thank you in advance!