I think you must be careful with your plan, I would not advise this course of action if I would giving actual legal advice because you are opening the can of worms. While there might, I emphasized, might be a way to make this work where in CA, you are running the risk, and so is he, of the house still going into foreclosure, and his rights as would be foreclosed along with your at any foreclosure sale. One of the other issue you will face is the due on sale clause, not that you might actually be "selling" it to him, but you are trying to gain the same results by another name through contract. The issue here is the potential to fail. I think while your plan may be possible with good legal advice and drafting, it is not recommended.
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Your contractor will probably demand title to the property (or at least a portion of it) as consideration for his investment. You can make him a tenant in common with you, or you can transfer the property to an LLC or other holding company which you and the contractor run. A power of attorney is not advisable. Whichever option you choose (and there are others), you need a good contract.