I'm looking to scale up my single family home rental business, (I currently own 2) but don't have enough for a down payment, rehab, carrying costs etc. I'm looking for a partner to go in on the financing with with me, and then maybe a silent partner or 2 to help with the initial cash expenses shown above. I feel like I have a fair ROI deal structure for the silent investors but I don't know how to assign a value to what I bring to the table and how I split ownership with my financing partner.
I would be handling:
Partnership agreement/Corporation set up
Any ideas on how I would assign a value to this so that the ownership stake is fair and equitable?
Thank you. I'm a new member to BP and am looking FW to hearing from seasoned professionals.
You just listed all the things you're doing or going to do to add value to the partnership...
The partner and I would secure financing and put up 2/5 of the DP, rehab, carrying cost, working capital etc and then silent investors would put up the other 3/5 of the capital needed in return for an equity growth % stake as well as an annual 'dividend' (% of cash flow) funded by positive cash flow after the cap ex fund is where it needs to be, probably after 6 years.
@Jeff Studer Nobody can give you the exact details on how to structure your deal, you need to consult with an attorney or someone knowledgeable in such matters, as there are too many variables. You might also do a search on structuring partnerships, etc. as there have been countless posts on the subject already written.
Also, I'd like to suggest you upload a photo of yourself. If for some reason you don't want your photo online, one of a hobby, local landmark or something that personalizes your posts is suggested.
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