Advice on a Partnership opportunity

[Matt Inman]

Hi All, I wanted to get opinions on a partnership opportunity. Being relatively new to the REI world I took some advice given here and started talking to people about REI. My neighbor turned out to be a great source of knowledge and I've been chatting with him quite often. He pointed me to another friend of his and I've been talking to him as well about a partnership. He works for a wholesale/rehabbing company and has quite a few contacts in other areas as well.

What we’ve discussed is a partnership where he finds houses in $70K-$80K price range, that with a $15-20K investment can sell for another $20 to 30K on top of that. I would supply the cash for the initial purchase and rehab, he would do all other work involved. I would be listed 1st on the lien on the property as well. We would do an 80-20 split of the profits, 20% to me 80% to him. We are drafting up a contract as well for the partnership.

My questions I have are:
What are my best options for protecting myself and my investment?
How do we handle the partnership agreement?
What haven’t I thought of that I’m going to need to consider?
I have talked to a few people who know him and he has a good reputation as a person who gets things done and knows his business. So I feel good about what he brings to the table.

Thanks,

Matt

[Michael Sherwood]

I think most everyone hit the point but a 50/50 split would be ideal. Especially if you are putting up all the capital and he is doing all the work. It is as simple as without your money the deal won't happen no matter how good of a contractor/project manager they are. best of luck! Mike