Profit Sharing

9 Replies

Hello Everyone,

I would like to know your opinions on what the profit sharing breakdown should be in the following situation:

I'm based overseas and I have someone on the ground in the U.S. that will be bidding on my behalf at the local county real estate auction. I will be providing 100% of the funds to pay for the properties each of which are estimated to cost about US$75,000. The plan is to fix up the properties (basic touch up) and put them back on the market and hopefully sell within 90 days. The person on the ground will be handling the buying, rehabbing and selling for me. 

Although this is a very general description of the situation, what do you feel is a reasonable compensation for the person on the ground?


if you just paid someone $20 per hours for 30 hours a week for 12 weeks (average project) that would be $7200 plus a 10% profit sharing  that sounds very reasonable considering the trust and the scope of the work 

@Steven Picker  seriously, you think that kind of experience, knowledge, market expertise, construction ability and trustworthiness is available for $20 hour? 

Assuming you possessed same , would you be willing to do this for @Suraj Nagrani  for $7200? If so, he should hire you. 

No but the scope of the project is only $75000 so there is limited profit and it might be a relative, friend, etc 

So I guess taking into consideration the value of the property (at this stage we will only be doing one at a time and slowly increasing), a profit split of 50/50 would be fair?

@Steven Picker  

@Don Harris  

what is your projected profit if it is under my $7500 analogy then 50% split would be in your favor.who is the person doing the work, it should be a very close relationship because you have little control of your funds

The projected return is 20% for a projected holding time of 90 days. Where I'm from that is quite ambitious so I'm giving it a go. The person on the ground is a very close relative with good insight and experience of the local market, so I'm not worried about losing my money. I just want to make sure the compensation is fair as I don't want to waste anybody's time.

sounds like a win win situation good luck. Keep us updated 

@Steven Picker  Thanks for your help and will definitely be keeping you guys updated. 

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