Partnering on my first deal

[Josh Rich]

A BP friend and I have been talking about forming a partnership by doing a fix and flip deal together and we need some guidance. Here's the rundown:

We are splitting costs 50/50, profit share is 75/25 (he is experienced and will be involved in the flip, I am out of state). We are both putting in $50k, mine would be in a form of a loan earning 20% interest-only for 6 months. (sort of like a Hard Money Loan with no fees). The deal will be in his name, or the name of his LLC. We are buying at auction, site unseen.

What is right, or wrong, with this scenario? What type of a contracting agreement should be in place? Any lawyers out there who wouldn't mind sharing some friendly insights? Any hard money lenders out there who might have some thoughts on the deal? Thanks in advance for any and all replies!!