Partnering For 1 Job

Rich Turley

I do residential remodel and repair and for the most part I work alone.

A customer referred me to someone needing a whole house remodel. Due to the scope of things I knew I would need help and invited a racquetball buddy to go in on the job with me. He has a small but successful construction company. My question is how to structure the deal? I am looking for suggestions as to splitting the profits and not pay taxes twice and what is a fair split. His company workers and some subs will do the work, so he will be behind the scheduling and keeping everyone on task. I will help out where I can, but I envision this as a learning experience, so that I can run the next big one myself using my own subs. It is a $90k project, three times any I have ever done before myself.

We know we have to come to an agreement and I expect to hear from the customer today or tomorrow as to getting the go ahead or not. I would be interested in hearing of any similar experiences you have had. How it was structured and what you would do different now.

Rich

Mike Finley

Traditionally in the real world when people do this stuff outside of construction you would create a joint venture agreement and a separate entity to process the money from the job and pay it out in accordance to the agreements verbage. In construction I'm waiting to hear the answers, but I suspect they will have more to do with beers than agreements.

red_cedar

First thing that came to mind is Sub some/all of it out to him. If it was me I would have to see how everthing was priced out/ broken down in order to determine what work goes to who. All insurance requirments would be met by all ( presumably).
Its still business.Everyone still needs to protect themselves and be liable where it applies. Just in case the friendship/ buddyship breaks down.
IMO

Bjd

Yes get a bid from him on all aspects of the job, this will protect bot of you and like Red said you break this down to each process and decide who will do what.

This is a big process for you, so you have to allow for the unknowns and things that can cause price changes.

Good Luck

BJD

PipeGuy

PLEEEEEASE! Retain an attorney to help you craft and ratify an agreement BEFORE YOU TAKE ON THE WORK. Just as you wouldn't try to build a house without a comprehensive understanding of the applicable building practices, don't try to build an agreement in the abscence of a comprehensive understanding of the applicable laws.