I am starting a new spec build and was looking for feedback of what a good builder/investor partnership deal looks like. I purchased the land and will supply the financing. I paid for a set of custom plans. A few builders have offered to do the project at 20% market up on materials and labor, asked for a $15,000 management fee paid weekly, have guaranteed completion in 7 months or less, and would participate in 50% of the profit at sale. This deals seams unbalanced and much to favorable to the builder. I would propose the builder to do the project at cost and we split 50/50 in the profits, or if the builder wanted to make money upfront through and take a management fee we split the profits 60/40 (60% would go to me). Is this unreasonable? Keep in mind I am not asking for a return or development fee on the land. Thanks.
