I need some advice on this real estate deal I am putting together. I have found a lot and want to build a spec house to sell. My dad is a builder so I would like to have him build the house. We are arguing on what is fair for profit split. My boyfriend and I are buying the lot at a great discounted price than lot value. The Land is valued at 432K and we are able to buy it for 275K. I found the property and worked the deal with the seller of the property. I am planning on building a house for around 450K that I have to get a construction loan for. My dad would like to 50% of the profit. Does this sound fair?
Sounds like you should pick a different builder who accepts your terms and split. Not to mention, doing business with family is problematic and often times will cause the family to go into permanent feuding.
If you cannot agree on the very first decision of an amicable split, it is likely you will be in disagreement with many other decisions required in such a transaction.
Personally, when I do a partnership, it is done inside of a trust, and the trust specifically states I make all the decisions; thereby eliminating disputes. If the other party does not like that, then we do not do business.
Hope this helps.
Never do business with somebody that you can’t sue. Your dad is starting off like a person that you will eventually end up suing. So I would get another builder. One that once I sue him Christmas dinner won’t be ruined forever because of it.