How exactly do investors earn money

3 Replies

Hello I live in Philadelphia, PA. I am new to the real estate world and for my first deal I plan to obtain a owner occupied duplex and build my buy and hold portfolio from there. 

My first deal will be funded by fha loan but I actually have a family friend that is in the business already. I am interested in approaching him for a partnership on my second property (which I know maybe I'm jumping the gun a bit, but I just would like to get my info together now) 

Basically I don't understand quite how to present to him it being a good investment. If we find a great property that cash flows $100 per door (let's say on duplex) does he only make the  $100 ($200 split two ways) or does he get that plus equity split or how does that work? 

P.s. This is my first post so please excuse if it's out of context in anyway 

Welcome @Rasheed Mcdaniel !  House hacking can be a great way to get started!

As far as partnership splits go, a lot would depend on whether they are just a lending partner and only earn interest on their money, or an equity partner that shares in the profits and losses.  It's all negotiable and there is lots of info on partnerships here on BP!

Welcome Rasheed!

Firstly, kudos on finding BP and making your first post. House hacking is a great way to get the ball rolling on your investment portfolio. My advice would be to absorb as much as you can from all the resources available here. The podcasts, books, webinars, and blogs will educate you to a point where you can bring more than just hard work to a partnership. Additionally, I would advise caution in partnering with your family friend. Make sure you guys hash out every detail regarding responsibilities. Once you cover everything figure out a compensation structure/split that make both of you happy, given what you are each investing. 

Best of luck! 

-James

@Steve Vaughan thank you for responding and for your advise. Since I've been diving head first into the site and finding a lot of good info. 

@james 

@James Brand thank you, I've listened to almost all of the podcasts now and sifted through the the UBG 

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