I'm looking for ways to approach a potential partner for a fix and flip. He has the capital for the down payment and I would cover the rehab costs, as well as, I'd be the one performing the rehab. What would be an appropriate and fair way to split profits? This would be my first investment property and any info would be greatly appreciated. Thank you.
Whether you set up an LLC or Corp which has an operating agreement or LP that has a partnership agreement. The agreement needs to have particulars of capital invested, responsibilities and cash flow split.
It really depends on the potential profit to determine what the split should be
If your not charging for labor of the rehab I would start with 30% for project management/GC and 70% to capital contributors. But would can ask for more of project management split if you got a good deal and or it is an intensive rehab
Here is an example
$100k total capital $80k him $20k you
30% PM/GC fee = $15K
70% Capital investors = $35k $28k him $7K you
Hope this helps good luck
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