What valuable asset(s) are you adding to a partnership?

[Cal C.]

Is it money, is it knowledge, is it contacts, is it something else?  

I ask this because sometimes newbies don't have a clue.  Here is an example, an investor was approached by a co-worker about doing some single family house flips.  The investor had done several flips over the years and had the knowledge, the contacts and the money to do their own flips.  The co-worker had worked in commercial re for a number of years, but didn't have much knowledge of the residential field. 

Co-worker planned to split flip profits 50-50.  When the investor asked how much money the co-worker would be investing into the flips, the co-worker replied I was assuming you (the investor) would be providing the funds.  However, the co-worker would be willing to pay half of the loan payments  until the flip was sold.  

Typical deal would look something like this. $70k purchase price $20k rehab costs, cashout finance of 75% LTV or 75% of the amount invested whichever is less. 6% interest only for one year. Closing costs about $2K. Payments would be around $350 a month. six months hold time selling price ~120K. Profit ~20K.

Co-worker thought since he was willing to pay $175 a month he would deserve $10K.  Even though the investor would front the $90k for a month to six weeks and then have $22.5K into the house for six months. Investor would also have the knowledge and the contacts.  

I think you can imagine what the investor said to the co-worker.   Bottomline-make sure you have something valuable to add to a partnership.  

[Ned Carey]

I bring my skill, knowledge and experience. Often I am the one also spending my time. to manage the deal. 

If the deal won't happen without my knowledge and experience than I feel I am certainly entitled to 50% even if I put up no money. As someone on the experience /work end of the deal vs the money end of the deal I say: