Updated over 5 years ago on .
Joint Ventures Risks, and Returns in Flipping Properties
How do most people split the returns on flip investments when it's part of a joint venture and one party is fronting the money while the other is doing most of the work?
For example, if Party A is investing 30% of the ARV but Party B is doing all the work (e.g. managing the purchase/escrow/closing, vetting, hiring and managing the contractors, overseeing the rehab and marketing the property for resale), what would be a reasonable percentage split of the profits?
It's important to remember that Party A is NOT a hard money lender. If the project goes south, they lose their investment. The risk from Party B, seems to be in opportunity costs regarding their time.