Partnership? - Posted by Tom-PA

Posted by JohnG on April 26, 2000 at 12:18:18:

There was an in depth discussion on partnering with a contractor here a week or so ago.

It was very informative and the bottom line was that partnering with a contractor is either a bad deal for him (he does all the work and gives up half the profit) or a bad deal for you (you find the property , creatively buy it; find a buyer and structure the deal and you give up half the profit).

Its like the Groucho Marx saying “I wouldn’t want to belong to any club that would have me as a member”. The guy who you really want as a partner doesn’t need you and the guy you end up with may be a week away from the receiver calling at the door.

I have found that the best “partnerships” are with a hard money lender who gets a great return on his invested capital and you get to reap the rewards of putting together a creative deal.

Partnership? - Posted by Tom-PA

Posted by Tom-PA on April 26, 2000 at 02:14:23:

I have a friend/contractor who wants to partner with me on a property he found. ARV is about $50-M. He will purchase for $10-M because out of 19 offers, the seller will sell to him because my friend brought his 3 kids, and the seller thinks he will be living in the property. So my friend does not want to hurt his feelings. But, then, after acquiring, he wants to partner with me. My Question: Shall he “assign” his contract to “us”? And Question #2…how do we structure this partnership? He will do all the work, since he is the contractor. He originally proposed “buying” for $10-M, and for me to put up $10-M for repairs, and we are 50-50 partners. What if repairs are only $7-M? Or, if he assigns property to “us”, then how do I/we fairly structure a partnership where I do nothing and he does all the work? Do we buy for 50-50, and then nickel-and-dime the material/labor costs? My buying cheap flooring,or my buying windows, and then letting him put hours in installing does not seem fair to me from his point of view. Any hints??

friends & partnerships…sometimes like ‘oil & water’ - Posted by SusanL.–FL

Posted by SusanL.–FL on April 26, 2000 at 15:10:44:

BEEEEE careful.

If you do do it, have E-V-E-R-Y-T-H-I-N-G spelled out IN writing!

Been there/done that…and been burned…

The only partner I would ever have on another deal would be my husband.