How to split up the profits, etc. with cash investors

2 Replies

Hi Folks,

I got a potential deal, and I won't be funding it with my own money, an HML's or the bank's. I found some folks that told me to find a deal and let them know, and we'll discuss terms.

Here's my question:

What are the general terms you'd set with someone who's potentially footing 100% of all the involved costs of the purchasing and other associated closing, repair, and due diligence costs? Are they considered a partner? If so, what percentage of the profits would they potentially receive?

Thanks in advance!

Mo

Moshe,

Congratulations on finding a good potential deal.  Partnering with folks with money and experience is a great way to start out.

I'd say someone funding the entire project is a partner.  50/50 would be my recommendation.  After you get some experience and can bring some cash to the table, you can promote yourself to 100% owner with a lender (who you just pay a financing fee).

Good Luck!

Chris

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