All Forum Posts by: TJ Kuhn

Thanks Nicola, yeah it might be, those are things I need to talk to the contractor about. Looking into predrawn designs. Trying to keep it basic. I will say we did a ~450 sq ft building recently and the actual build was 2 months, much simpler with no plumbing but I’m trying to project the pace onto this project. For all I know he might say it needs to be longer.

Henry this is great stuff thank you. My research on LLC has begun. I will have to seek pro assistance with the appropriate exit strategies to include but I think we'll all agree the deal needs to be in writing from a lawyer, hopefully one that is willing to spell it all out for first timers.

Maybe contractor takes a reduced rate for labor and it comes back to him at the end? 

I’d like to keep it this team of 3 because of the trust factor, because of the funky arrangement with me helping, and because I have seen how quick and on it the contractor is. I had not thought much about the risk sharing aspect so i will ponder that.

Is the logic of #7 basically ‘you’d be risking less than the other two and your cut should be accordingly smaller?’ Or is there more to it like where the 1/5th figure comes from?

I am looking at this as an introductory project for me, yes, one that is bigger in size/$ than maybe I ought to take on but wanting to take advantage of my current location and network. Don’t know that we’d be starting an ongoing operation but I do think I’d be planting a seed with the experience.

Hi, I am new and have been scouring this forum and the internet for info on my build idea, haven’t found exactly what I’m looking for. Maybe someone has done a deal like this or just knows more fundamentals than me.

So what I want to do is buy a residential plot of land where houses are valued high (lots of areas on Cape Cod), build a ~1000sqft SFH, and sell, in a period of 6 months or so.

I would like to do this with two partners who are trusted acquaintances because in my mind we all fill a need.

1. Money Guy, can do a hard money loan  of maybe 270k to buy the land and fund the build with cash (I have some cash to throw in too), and then after we sell he gets his $ back plus a TBD % interest. He puts in money and not work.

2. Me, Hybrid Guy, I do side work [for Contractor Guy] as a carpenter but would not undertake a new construction as gc. I have 40k I can throw into the purchase with Money Guy’s money. And I can work under Contractor Guy building the house, like 20 hours a week. I put in some money and some work.

3. Contractor Guy, he is a good dude who works super clean and fast, and I like working on his jobs and learning from him. I guess in this type of deal he puts in little or no money and lots of work, and we split profit after selling the house and paying Money Guy? 

^This is where I have questions. I still have to pitch the idea to Contractor Guy and I want to make sure it’s clear and appealing.

Would it make sense to have MG pay CG through the project just like any other client’s project CG takes on, and then CG also gets a cut of the profit after sale? 50/50? Is that imbalanced?

I’m having trouble wrapping my mind around the risk levels and incentives and how it should shake out to be a good deal for everybody.

Any input is appreciated including “you sound a bit too dumb to do this, just don’t do it,” or “here’s a sample contract of exactly what you’re describing,” or anything you got. TIA.