Silent Partner

[Brian Johnson]

I am looking to partner with a friend of mine. He is going to put up his credit and half the money for a but and hold purchase. He has agreed to let me run the property and he is going to act as a silent partner.

My question is, how should I structure the deal?. I mean I have an idea, but I have never done a deal like this.

What details am I missing and what should I be aware of?

The property should return $1500-$1700/month profit. Should I structure the agreement like a 55-45% ownership deal or should it be 50/50 and an agreement with my current LLC. to manage the property.

I am a newbie and any and all advice would be useful.

- Brian

[J Scott]

So, the other guy is bringing 50% of the cash and credit for the mortgage.

You're bringing the deal, 50% of the cash, rehab management and management of the property after it's rented.

Is that correct?

If so, in my opinion, you should get paid a reasonable PM fee (perhaps 10% of gross rents, but nothing extra for tenant placement or repairs), and then a 50/50 split of all cash flow and profit sharing.