What Would YOU Do with this Proposal? - Posted by David (CA)
Posted by David (CA) on March 09, 2001 at 11:25:28:
Need your wisdom and experienced opinions.
Had lunch with a general contractor friend yesterday. He asked me if I would like to do join forces with him to rehab properties. We have known each other for 13 years. WE consider each other good friends. We trust each other with our lives and our families. He does not have the time or the system in place to find fixers. He is very aware of what I am trying to do in real estate.
This is what he proposed. I will do whatever it takes to find the fixers, once they pass the due diligence he then begins the rehab. All labor and materials are at his cost and will be charged to the rehab at cost not retail! He will pay for these costs out of his own pocket! These rehabs will also help to keep his crews busy and employed in between his own biz and our rehabs.
Before rehab is complete I will begin the sales process to get it sold asap. When rehab is complete it will be my responsibility to get it sold. The plan is then he will be working on the next rehab. We will split the profits 50/50 on the back end. He has two crews working for him currently.
As for the other issues of structuring the biz, and other operating expenses and up front costs IE: deposits on offers, costs of hard money loans, advertising, monthly payments etc, we are currently working those out.
What are your views on this? Trust is not an issue for me. Does this make good business sense? What are the pro’s and con’s I should be aware of? Your insight and opinions would be greatly appreciated.
Thanks for your time,