Deal Structures | Builder
Builder & GC Partnerships
For a builder, a JV is the path from "I get paid to swing hammers" to "I own a piece of what I built." The trade-off is real — you take on personal guarantees, your fees may get deferred, and your reputation is in the deal. This page covers the four modes builders can play.
The Four Builder Modes
Pure GC, no equity
Upside
Predictable cash flow. Fee for service.
Downside
No exposure to upside. Treated like a vendor.
Who It's For
Builders who want to grow their book without taking on financial risk.
GC + small equity (5–15%)
Upside
Some carry, full GC fees.
Downside
Limited promote.
Who It's For
Builders climbing the ladder. Reasonable balance.
Sponsor-builder (25–35% equity)
Upside
Real promote on the back end. Control of the project.
Downside
Personal guarantees, deferred fees, and reputation on the line.
Who It's For
Established builders ready to be developers in their own right.
Builder-led principal (50%+)
Upside
Full control and full upside.
Downside
Full risk; lender will require a substantial covenant.
Who It's For
Builders who could self-develop but bring in capital for leverage.
Rules That Keep The Build Honest
- →GC fees are charged at independently verifiable market rates, not "what works"
- →Trade contracts are open-book to a non-builder partner or independent QS
- →Related-party vendors disclosed and approved before being used
- →Cost-plus arrangements have a guaranteed maximum price (GMP) cap
- →Builder shares in cost overruns above an agreed contingency, not just upside
If a builder partner pushes back on these, that's a signal — not a negotiation tactic. Walk.
Best For
- ✓ GCs ready to graduate from fee-for-service into equity
- ✓ Builders with a credible portfolio of completed multiplex work
- ✓ Builders willing to put a personal guarantee behind their numbers
Usually Fails When
- ✕ Builder controls construction and the books with no oversight
- ✕ Related-party trades are not disclosed
- ✕ GC fees are inflated to compensate for a small equity slice
What To Verify Before Spending Money
- → Construction contract is GMP, not open-ended cost-plus
- → Independent QS reviews monthly draws
- → Builder shares cost overruns above contingency
Official Sources Referenced
Explore Your Lot's Joint Venture Potential
Enter any BC address to see what a multiplex JV could look like on this parcel — unit count, rough build cost, and what the land contribution might be worth.