Rental Property Investor · El Jebel, CO · Member since 2018 · 29 posts · 33 votes
Greetings BP!
I'm going to be forming an LLC with my investing partner (Hi, Mom!) to protect her assets. What I'd love some feedback on is an equitable equity split. We can both bring cash to the table, in roughly equal amounts (although she may have access to more cash in the future), however, I will be doing most, if not all of the legwork (managing the rehabs, finding and managing PMs, working with Agents, Attorneys, CPAs, etc, etc). I've heard Brandon Turner say he's done deals where he brings the hustle and they bring the money and they split 50/50. What might that mean for partners who are both bringing money? Does anyone else have examples of splits with a similar situation to mine? 60/40 (to me) in, 50/50 out? or Vice versa? etc. etc.
Rental Property Investor · El Jebel, CO · Member since 2018 · 29 posts · 33 votes
7y
@Jim Goebel Thanks for the comment. We could still structure it as a private lender arrangement. Have you had bad experiences with family before?
I've been in business with family on other ventures, and it definitely has its ups and downs, but is there a reason this particular arrangement would be troublesome? Thanks!
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
7y
I have worked with family on many occasions. Never had an issue because I did what I said I would. If there are issues that are beyond your control, the family will realize that.
Personally if you are doing all of the heavy lifting, I would get family members to be the private lenders. You could give them a super duper interest rate so that they are in fact getting some of the profit. Maybe give them 12% for short term money(1 year or less). If they go longer give them 6% or 7%. You said that you have money, but there is nothing like getting a little leverage.
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
7y
Very cool. I have been here almost all my life. I love that we get snow for a day or two about every 10 to 15 years.
Maybe make it 50/50, but you also get a small salary for running things after a year or two. Discussion of roles with her is probably an easy conversation to have. ASk her what she thinks also. The great thing is that you two can do whatever you want to do. There is not set structure or percentage.