Selling property with partner. What type of profit split?

Question

Hi I'm a newby at this stuff, so any help is appreciated.

Background:  Partner puts down 20% of down payment.  We finance rest of loan and manage property including repairs.  Let's say this is a long term investment (minimum 10 years) property that we will use as a rental.  When we go to sell what is a fair/typical profit split?

thanks for the advice...

Account Closed · Answer

Friends or strangers matters little to what I am going to say.

Get the deal agreed before the project starts. Build into the agreement that someone could be sued, file for divorce, die or be injured. Hence you could end up with a new partner or an executor who was not there during the initial discussions.

John Corey

Joshua Dorkin · Answer

Oh . . . I am 100% in agreement with the previous poster.  I advise you avoid friends and family when it comes to REI.  It can easily lead to serious problems.

Andy Grace · Answer

Dont do what I just did. Mixing friends with real estate. Did a fixer-upper, then questions about compensation for labor, then wife battle each other, then friendship lost. Not worth it. Read all the tips and get all in writing. Do what I did not do, get it all in writing BEFORE buying the place. My first post, this subject hit a nerve. I am financially able to do investing alone, thought it would be fun, and now lost a friend....sad

Joshua Dorkin · Answer

To clarify:

Your partner is funding the down payment for the property.  Will the loan will be in your name?

Are you saying that you will be running (managing) the property on your own?

I want to make sure I understand before I comment here.

With that in mind, let me point you to a few articles that may help you a bit . . .

- Establishing a Partnership for a Real Estate Deal
- Real Estate Partnership Questions