Deal Structure Question (% Split between partners)
My question is this... on any subsequent purchases where I'm pulling more than 50% of the weight, how much additional percentage (assuming 50/50 downpayment) would the other legwork be worth... 55/45 or how would the legwork typically be reflected in the deal. Thanks in advance, looking to buy more property with other parties and wanting to ensure the work I put in is reflected accurately.
Thanks in advance.
@George Red I think its important to sit down and figure out which items you will do in the future. If your doing all the work and still contributing half of the downpayment money, maybe you would be better off finding a partner who can provide all the downpayment money but does 0% of the work, still split 50/50 or so.
If you continue with your current partner sit down and list out all the items and who is responsible for what items (finding deal, underwriting, downpayment $, financing, setting up everything, managing the rehab, self-managing or managing the PM, etc). Figure out who will do what, then can dive into what the split would be.
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Sounds like you're doing 100% of the work, why do you need your partner? If you want to do it right have him put up all the money and you do all the work split 50/50
I have to agree with Eliott. It doesn't sound like your partner is bringing much to the table. Do you need the partner for the capital? There are other options that will allow you to keep the equity. You could even continue to involve the other party by offering to take a loan from them and paying them interest if you really want to include them.
That being said, consider what your time and effort is worth and then negotiate. I would personally ask for more than 5% (55/45 split) for all of that work, but that's just me. What is it worth to you?