How to Pay Ourselves

[Timothy Jacobson]

In under nine months, we have three projects under our belt. One was a flip, one a buy and hold, the third is a BRRR. A fourth is on the way: this will BRRR as well, and we will JV with a private partner to rehab.

Now that we've seen some success, and are getting our feet wet (barely), we are looking to understand how the business can sustainably bring value to our lives. 

Hypothetically, we have three members at 45%, 45%, and 10% ownership. 

One 45% member is our contractor and day to day manager. With our projected cash flows and project plans, we believe we can begin paying him regularly. This frees him up from other jobs to focus solely on our business. 

We are initiating a Profit First system,  We are thinking of starting profit (distributed quarterly) at 1%. But we are a bit hesitant to start an "Owners Pay" percentage higher than 10% to begin, because we are beholden to initial loans from investors. 

We would like to better understand how to structure pay to remaining partners. Does anyone have advice on a profit first system, or tidbits on how you put systems in place to calculate cash extraction while maintaining growth. 

[Craig Garrow]

Timothy Jacobson Profit First is an incredible book! I'd be curious to see how you're setting all of this up!