[911Rob]

QUOTE=berettafan; btw, is there enough cash in the entity to cover the projected losses?
Yes, we're not into losses yet, just cost over runs. If I add up all my end of the expenses I've paid directly, which include surveys, permits, utility costs, commissions, etc.; then we're into losses.

if so was it contributed in proportion to your ownership of the entity?
No, I'm the sucker paying the bills. All of them.

Is there debt? Who signed for it?
No debt. There was a development blanket mortgage that was paid off over the first few sales.

Have you been in touch with the customers and their banks? Any issues brewing re. draws vs. completion?
No issues to date. All but one have completed over 90% now.

Whose money will cover punch list stuff after settlement?
It's become very clear, it's my nickel all the way to the end. (when I say "my", it's actually the development company that's owned by 2 of us.

It seems you've resigned yourself to the fact that you took on ALL the risk and less than all of the upside potential HOWEVER my concern is have you accurately evaluated the potential loss.
Yes, that's correct. Largely because I didn't want to be the builder, when we started this project in late 2006, you couldn't get a builder if you paid him a million dollars, fyi. Subtrades were the same, it was very challenging.

berettafan; the cynical outlook is that you temporarily fixed his cash flow problem and he'll be back when that runs out.
Thanks for your insight. I am aware of this. I tried to offer him a deal whereby he would accept some responsibility to the bottom line; he refused. I also gave him the opportunity to put some of his "profits" on the table; he did not. I'm going to give him the chance one more time. I've paid him some funds, I'm paying him some more today now that I have an accurate CTC from him. I'm not stupid, I could see the money flying out the window the last two months. Saw this coming.

At this point he's more like an employee than a partner. I've taken over control of the site 100% and will be organizing the completion of the remaining 10% to do.

Don't know the details but IF you aren't the one paying the subs on these 10 homes I suggest you make it that way.
He pays the subs. Out of $1.8 Million in sub payments, we only have about $50K left to pay, so it's irrelevant at this point. I've made it clear that I'm holding the $50K back from him (builder) until deficiencies/seasonal work is done; whereby he must holdback from subs. Another reason I wanted subs, I hate dealing with subtrade payments/issues. This guy is great at that stuff.

I ask myself, If I was the builder, could I have done the project more economically myself. Fact is, probably not. So I'll pay the bills and move on without the guy.

Rob you seem to be a heck of a guy. The pride you take in your personal relationships consistently shows itself and I think that is fantastic.
Thanks buddy, easier said than done at times. I value friendship very highly, there is nothing I wouldn't do for a friend. What else is there in life.

I had one of our deals fall through in this development; so now I have to list/sell that home to someone else. The original purchaser bought the home with a $50K deposit, blueprints, custom designed. He made me do some stupid things and he added costs to the project with some of his selections (hardwood in bedrooms, extra windows, fancy tiles); I let the guy go on the extras because he was cool and didn't hassle me about the small stuff like most do. Just before completion the bank pulls the plug on the dude.

We spoke to his bank and tried to salvage the deal; it was salvagable but ugly, the guy really couldn't do it. My dev partner and I both unilaterally agreed to give the guy back his $50K and cancel the contract.

When we were discussing our revenues vs: expenses with our builder, he exclaimed, "why would you do that? you could've kept his deposit" Ha, yeah we could've, but we still have the home and it'll be easy enough to sell. We're gonna take a small hit on it, it pisses me off that I did the extras for the guy, but it in end it was the right thing to do. Thus, one good partnership vs: the other not so good.