Advice on partnership equity split

[Jed Wood]

A potential partner and I are trying to come to terms on an equity split for our partnership. I'd love to hear opinions of all kinds regarding what's fair, preferably from those that have been a part of this type of deal before (as either the cash/limited partner or the deal provider/general partner). Would also love to hear alternative arrangements that have worked well for you. Here are the facts:

Deal type: a batch of SFH and small multi-family spread across two geographic markets. Buy and hold for 8-12 years.

Deal value: $1MM

Cash invested: $250k (split, each providing $125k)

Projected CAGR: ~14%

As the managing/general partner, I will be managing the property managers, securing financing and having sole liability for the loans, keeping the books and coordinating with the accountant for filing taxes. I also found the deals, which are off market and at a bit of a discount.

I'm proposing a 60/40 equity split. The limited partner wants to do 55/45. I've been buying and overseeing rentals in these markets for a couple years. The limited partner is coming in new.

Thanks!

[Alina Trigub]

@Jed Wood

Consider keeping the split the way he wants it but add the fees for the services performed, such as fees for finding properties, asset management, etc...