Playing the numbers game without any clue

[Shane Humes]

I am new to real estate investing.  I am in a different position than most investors, in that, I have more capital than time.  This is a good scenario for a partnership, but I'm not sure what the standard is for the split. 

If I am in a partnership with one other person to buy and hold single family and small multifamily (2 - 4 units) properties, and I provide the financing along with all of the down payment, and my partner does the hustle work (finding properties, managing properties, etc.), what is the standard way to structure the division of cash flow?  

Thanks for any responses.

Shane

[Joe Villeneuve]

Not all strategies warrant the same % splits.  For instance, if my cash partner comes in with all the cash on a hold property, but within the first 6 months we have all the cash back plus...and we're all cash flowing, the cash partner gets 20% of the deal.  Once they get all their cash back, they have nothing left in, profit made, but still cash flowing.

On a flip, the Cash Participation may be 50%, but if added cash is needed, for any reason, and the original Cash partner can't supply it, then the source of that new added cash gets part of that 50% thus reducing the original CP from 50% to ??% ...depending on the cash amounts contributed by the different cash partners.

There are many more ways to set different partner splits.  We even have cash partners come in after the fact, when the property is already cash flowing.