50/50 Partnership Question

2 Replies

In Brandon's books/webinars, he talks a lot about how he made his first deal. The partner brought the 20% down payment, Brandon took out the mortgage & did the management. Cash flow, expenses, & future equity split 50/50. 

My question is this---what happens to the Partner's original cash investment when the property gets sold?

1. Partner gets that nominal down payment back, and THEN the remainder of the equity is split 50/50.

2. Partner gets nominal down payment + interest back, and THEN the remainder of the equity is split 50/50.

3. Partner doesn't get the nominal investment off the top.  Each party gets half the profit.

*Note: Not looking to debate if 50/50 is good/bad idea. Just wanting to know how the partner's original down payment is "paid back," if ever.

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