50/50 Partnership Math

4 Replies

Hey folks,

This might of been asked before but I cant find it:

Can someone explain to me the the 50/50 split if one partner is providing all the funds and the other partner is doing all the work? Does the partner who provided the money get his money back and then whats left is split 50/50 or is all the profit split 50/50 and that includes the originally invested money?

So lets say the money invested by the one partner is $40k

The profit on the rehab sale is $100k

Does each partner get $50k = a $10k profit for the investor

or

Does the investor get his $40k back and they split $60k

Thanks

Ill assume the 100K is funds from sale rather than profit.

" investor get his $40k back and they split $60k" is more common, and IMO, more fair.

Theres nothing wrong with the first option, and you and your investor can agree to any split you guys want, however, I think it may be challenging to find an investor to agree to the first option


Medium sunbase logoJesse Tsai, Sunbase Homes | [email protected] | 7023243426 | http://sunbasehomes.com | NV Agent # S.180768

Originally posted by @Robert Kramer :
Hey folks,

This might of been asked before but I cant find it:

Can someone explain to me the the 50/50 split if one partner is providing all the funds and the other partner is doing all the work? Does the partner who provided the money get his money back and then whats left is split 50/50 or is all the profit split 50/50 and that includes the originally invested money?

So lets say the money invested by the one partner is $40k

The profit on the rehab sale is $100k

Does each partner get $50k = a $10k profit for the investor

or

Does the investor get his $40k back and they split $60k

Thanks

How the split is done is between partners, but 50/50 implies splitting the profits. The $40k is expenses, not profit. If the investing partner, who bears all the risk, only gets 20% of what the other partner gets that is nowhere near a 50/50 split.

@Jesse Tsai Thanks for your quick response.

" investor get his $40k back and they split $60k" is more common, and IMO, more fair."

I would agree and wanted to make sure before I approched anyone.

@Walt Payne - OK - That makes perfect sense. Everyone get reimbursed for their out of pocket expenses and then the money is divided up.

Thanks

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