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Author Topic: Partnering With a Contractor on Rehab Projects  (Read 1684 times)

Offline ReadyFireAim

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Partnering With a Contractor on Rehab Projects
« on: July 18, 2006, 11:29:01 pm »
I am partnering with a fixer/handyman guy. I find, negotiate, contract, and finance the deal. He does the rehab work. We partner to buy, rehab, and sell for profit. We split the profits 50/50 after all expenses and financing is paid.

If there are others that have this type of relationship with a contractor/fixer person, I am wondering how you manage the relationship so that the contractor doesn't milk the budget for his benefit.

Call me paranoid, but I feel like my contractor is pricing the jobs higher than they should be, then when things are already rolling, he never has enough money to do the job we originally intended.

So, he's pretty much double dipping (making money as the contractor on the front end, and as a 50/50 partner on the back end).

Any tips on how I can manage this relationship better?

Offline cherdwelth

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Re:Partnering With a Contractor on Rehab Projects
« Reply #1 on: July 19, 2006, 06:38:05 pm »
Are you paying for the rehab with your money or your partnership money?

Are you paying him labor on the fixup? If so you can do a cost/plus bid. He will give you the material costs and add his percentage for labor on top. You need to make sure you get invoices from him to keep him honest.

If you feel he's padding the bills, I'm wondering if he's the right partner for you.

Good luck.


 




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