Equity Split on Multi-Family

[David Levin]

Hi All! I would like some feedback on structuring a deal. Here is the scenario:

Purchase Price - $525K Seller pays closing - Total to close is $131,250

My Investment is $50K (plus reserves if needed) - I also did ALL lifting to acquire the deal. 

Partner 1 - $50K 

Partner 2 - $35K

What would be a fair split? 

Thanks!  

[Todd Dexheimer]

If this was a typical syndication you would get around 30% equity and the investors would get 70% of the equity. In this case you are investing $50k which makes up 37% of the 70%. In total you would get 55.9%. 

You would also get a one time 1-3% acquisition fee based on the purchase price and a monthly occurring 1-2% asset management fee based on the gross revenue.

If this was me on a small deal like this, I would probably do a 40/60 split to make it simple. 40% to my investors based on their investment amount and 60% to myself