Partnering with a contractor for flips?

[Jeffrey Vegh]

Hi all,

I have one fix and flip property under my belt that I did solely on my own (no investors) and took on all costs associated with the project, including all rehab costs. For my next project, I was looking into taking on investors. I've always liked the idea of partnering with a contractor, so that I wouldn't need to worry about any of the construction headaches and they would handle everything in a timely manner (especially since they would have a vested interest), while I handle all other costs/investments related to the property. Does anyone have experience with a partnership like this, or can shed some advice? How should a deal with a contractor be structured? The few hesitations I have about partnering with a contractor, as opposed to simply getting an equity investor and sub-contracting the project out, is that there's no way to know what quality materials are being put into the project (e.g., it would benefit them to go as cheap as possible) or if it would be better financially to just hire them, instead of partner with them.

Thoughts? Advice?

Thanks,

Jeff

[Greg Dickerson]

Originally posted by @Jeffrey Vegh:

Hi all,

I have one fix and flip property under my belt that I did solely on my own (no investors) and took on all costs associated with the project, including all rehab costs. For my next project, I was looking into taking on investors. I've always liked the idea of partnering with a contractor, so that I wouldn't need to worry about any of the construction headaches and they would handle everything in a timely manner (especially since they would have a vested interest), while I handle all other costs/investments related to the property. Does anyone have experience with a partnership like this, or can shed some advice? How should a deal with a contractor be structured? The few hesitations I have about partnering with a contractor, as opposed to simply getting an equity investor and sub-contracting the project out, is that there's no way to know what quality materials are being put into the project (e.g., it would benefit them to go as cheap as possible) or if it would be better financially to just hire them, instead of partner with them.

Thoughts? Advice?

Thanks,

Jeff

 There really is no reason to partner with the contractor unless they are bringing the deal or providing capital. You can just hire them to do the work. The key is finding the right contractor.