I ran into this guy through an ad that he placed. He is looking for a partner to flip houses. He knows more about construction than I do and I've been wanting to flip homes, so I figure we could be partners.
The thing is, he has no money, so I'd be buying the place, yes it'd be in my name.
He wants me to pay him like 10 bucks an hour, then we would split the whatever profit we'd make after the work was done and the house was sold.
I am thinking a split like 70/30, but I am not really sure that this is a good idea.
Any help would be much appreciated

You make your profit when you BUY.Do you know anything about values and selling homes.I invest but I am a real estate broker who knows my values really well.

In these markets if you buy to high or underestimate repairs you will not be able to sell and will be stuck renting it out.You have to rehab in mind knowing you need to have the best house with the best list price to move it fast and make a nice profit.

If you don't know values and his experience in construction is limited mistakes and slow progress will cost you time and money.

I don't like the 10.00 an hour as the longer he takes to finish the more he can milk it as you get more on resale.Better scenario is you pay him nothing and you split 50/50 on resale. This way you have risk with your money and he has risk with his labor and time. He will also be motivated to finish on time and on budget this way to get his money ASAP.

You might be better off hiring an experienced rehab crew for the job.

Whatever agreement you come to have an attorney draft it up.

Yes, I have limited experience appraising and I've bought my share of houses over the years, even created a few 'rent to own' deals with mobile homes.
I wasn't too comfortable with the hourly thing, it just didn't make sense, I mean why not just go an hire a contractor and do it myself. ok, I like the agreement idea with the attorney also, I've had my fill of working with no good bums.
How would you suggest finding a rehab crew?
The house looks like a good deal, 26,000 purchase with 14,000 estimated to rehab, market value is about 70,000, in a good neighborhood.
I am not sure how to evaluate market conditions. I am in oklahoma so being an energy state, our economy is fairly sound, but I guess that could change at the drop of a hat these days.

I've seen many a "flip" houses sitting on the market because the flippers cut a LOT of corners, slapped on some white paint, threw some ultra cheap carpet down, put in the cheapest counter tops and appliances they could - and the buyers come in and the house just screams "CHEAP CHEAP CHEAP" and they wonder if the quality of the important work behind the scenes, that you can't see - is just as poorly executed as the stuff on the surface.

Flipping in real life is not what it's like on TV, as much as we'd like to believe it is.

This sounds like you're just buying a Job for this Guy. What's he living on now ?

Has he done this before; what happened to the Prior "Partners" . . . . No Repeats ?

Who is going to supervise his activities ? Will he be an Employee ? . . . . like with WC, UEC ?

Does he come with references; past projects completed, on time, that you can go and look at ?

How did this $26,000 House get selected ? Because it's convenient for him ?

I agree with Super . . . . this doesn't sound like a good deal for YOU. Could be wrong; talk to previous Partners (if there are any). Don't be the Guinea Pig in somebody else's hairbrain scheme.

I hope you left it with Don't call me; I'll call you !

Plus I wonder about the quality of a guy who is gonna work for $10 an hour.

My husband charges 3 times that - but then again, he's goooood.

Oooo, better behave myself....

One of my friends owns over 50 + mobiles. That's a different animal entirely.

You can find rehab crews by going to your local investor meetings and then checking references.It's better to negotiate a price with a company who can do it all for a good price.

The reason is sub-contractors live paycheck to paycheck and if you try to find one guy for this and one guy for that to shave 50 dollars and stuff like that the work usually has to be redone or the desperate sub gets a bigger job right in the middle of yours and says SEE YA!

With a company the subs know if they show up and complete this job more work is waiting for them in the wings plus they have already jelled together as a team working in union and will get the rehab completed faster.

Cut checks to the subs directly or have everyone sign a lien rights waiver in case the contractor doesn't pay the subs that way you don't get stuck paying twice to release there lien on the property.

Are you going to be paying all cash on this deal??

Have you factored in utilities,labor,materials,and contingency fees (fudge factor) and does it still look good?


There can be no about you have to know what market is.Are you basing the 70,000 off of solds or actives? I go by the most recent solds comparable to the subject in the holding time versus profit amount I want to sell in.

The best thing I can say is with a flip KEEP it simple.Make the most costs effective improvements possible and do not overimprove for the area.It will sell faster but you won't recoup the costs.

Use Donald Trump's principles of value.When a buyer walks in they look at each room.Have one or 2 things that scream QUALITY.From that point in the buyers minds everything else has quality.So maybe nice light fixtures or a designer faucet in the kitchen.If everything looks cheap it won't help it sell as the buyer thinks they are getting a lemon.

So in short don't overimprove and select a few items that will make it pop and look super quality all around.

I have also found that I can't stop thinking about this !

"Who" is paying for the materials ? "The Guy" has no money; so it must be You. All of those material costs must be backed out and refunded to you before any split. But "How" will those material costs be determined ?

I once had a Contractor who worked "for Me" and I paid him at an hourly rate even when he was shopping "for Me". A little Audit I performed after we were into a project a few thousand dollars revealed that he had also been marking up everything he purchased "for Me" by 25% before carrying it forward to my account.

Try to get all those material expenses, and the profit to be made on them, clarified UP FRONT ! There is a smaller emotional coefficient involved at the beginning BEFORE you have come to realize that the Party you're dealing with is a Thief. (i.e. A Fake, A Phoney, and a Fraud) Good Luck !

You guys are awesome! Turns out, by the time I joined this site,last night, and this morning, the place already sold. Oh, well, I have a feeling there will be more to come, Still, I have taken your advice and have decided to 86 the former 'partner'. I never did trust him to be honest with you.
I also discovered a realtor that will finally work with me and blackberry me any future properties that meet my standards.
So, that's the bad news / good news.
Again, thanks so much for the advice!!