Help Analyzing Flip Deal in Buena Park, CA

[Kelly O'Quinn]

My partner (who is a RE Broker) and I are in negotiation to purchase a 2 bed, 1 bath, 750 sq ft home in Buena Park, CA to flip. This would be my first flip and first purchase in general, and I was hoping to get some feedback on my numbers. We are offering to purchase the home through seller financing (the owner is the original owner and has a good, long-standing relationship with my partner), go on title as tenants in common (my partner's corporation would be on title with me), and I would contribute the cash for the down payment and rehab cost. My partner has agreed to pay me a set interest rate on the cash I contribute, then share the remaining profit with me 50/50 at resale. I have known my partner and worked closely with him in various business ventures for 5 years, so I have a good amount of trust in him. Since this is my first flip, I'm not as concerned with making a huge profit on it because of the experience I'll gain, so I'm quite happy with my projected total return (see spreadsheet below). Here are the terms:

Offer terms with seller financing:

Purchase: $250,000

Down: $30,000

Seller Carries: $220,000

Interest due to seller (annual): 5%

Term: 18 months

Payments: Interest only = $917

Closing Costs (1.3% for escrow and recording fees and prepaid insurance/taxes/interest): $3,250

Rehab and Holding Costs:

Rehab: $60,000

Property Taxes (monthly): $257

Insurance: $200

Utilities: $150

Plus 10% buffer = ~$670

Resale:

ARV: $375,000

Closing Costs (3%): $11,250

Commission (5%, my partner and I would co-list): $18,750

My Contribution:

Cash Invested: $90,000 (down payment + rehab cost)

APR: 5%

Term: 5 months (could vary depending on number of months actually held)

ROI:

ARV: $375,000

(Selling Closing Costs): (11,250)

(Commission): (18,750)

= Gross Margin: $345,000

(principal on seller carry): (220,000)

(total interest on seller carry - $917 x 18): (16,500)

(purchase closing costs): (3,250)

(holding costs - $670 x 5): (3,350)

= Gross Profit: $101,900

(repay my cash investment plus interest): (91,891)

= Net Profit: $10,009

Here is the spreadsheet I used for all the calculations:

Have I calculated everything correctly? Is there anything I'm missing? What risks might I be taking? Is there anything special I should include in the contract either between me and my partner (I'm planning to include terms of my cash contribution, how we will hold title, who is responsible for what during the rehab and listing, and how disputes will be settled) or us and the seller? Any input you have is very much appreciated!