How much do you look for in an equity partnership?

[Tom Kuhen]

      This is geared more toward the investors who have done equity partnerships before, but I welcome everyone's opinion. What dollar amount do you look for when you decide to go in on a property with someone. Assuming one person funds the deal 100%, and the other does 100% of the rehab/ project management. I've heard 50-50 quite a bit, but if one is funding 100k with a 25k profit to split, it may not be worth it to that person, or the project manager.

    I have a property under contract, and unfortunately my mentor is tied up with 4 properties right now, making my initial lender unavailable. I have one or two other PL that I could use but are a bit more. I'm also considering a partnership with them and would like a better grasp on how to approach them.

Thanks,

Tom Kuhen

[Michael P.]

@Tom Kuhen

There is no doubt a balance that will be flushed out dependent on what the Non Money Person brings to the table and just what they are doing.

Given your scenario being your first deal and all I would say you should expect to give up a lot, and frankly you should, just to get this experience. I think you are on the correct path willing to give up 70%, maybe even more.

My advice is have a long term mindset. Know that if you can get this first deal under your belt it will help your business moving forward and your future splits will be heavily pushed towards the 50/50 split, especially if this first one goes well.

Goodluck...