If I partner with someone where I fund a SF fix and flip completely and my partner manages the reno, what percent profit split would you recommend? Thanks!
Typically, I find the deal and I take care of the rehabilitation of the home. In that case we usually do a 5050 split. If it was the case that you're asking about, I would ask for 60% for doing the legwork on finding the home and for funding the deal 100%
It depends on who found the deal, negotiated with the seller, etc...if you are just providing the funding and your partner is handling everything else, a 50/50 would be fair compensation. I'm about to do this kind of JV deal with a private money lender. He is going to charge the usual points and fees, but no interest.
So, if I understand, you are buying the property, paying for material and labor and then marketing and selling the property and your partner is managing the renovations. In this case I would negotiate a fee arrangement and not tie it to profit.
Thanks so much, folks.
@Adam - When you say that you take care of the rehab, do you mean that you are doing the work yourself or managing the rehab process with others doing the work? Also, could you please clarify this bit "I would ask for 60% for doing the legwork on finding the home and for funding the deal 100%."
Does this mean you would not offer the other person a share of the profit if you were finding the deal and funding it, assuming they managed the rehab? I'm a bit confused. Appreciate some help understanding your model here. Thanks!
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