Updated over 7 years ago on . Most recent reply
Partnership profit split percentage
My brother and I want to partner on a single family flip in Idaho. I live out of state, and will be doing all the direct mail marketing, answering the phone, qualifying the leads, and financing the deal.
He lives in Idaho and will be inspecting the property and doing the work and/or managing sub-contractors.
I’m wondering what kind of profit split would be fair to both parties after all of my initial investment is returned.
We want to write up a contract so that our roles are clearly defined and expectations are laid out. Right now we're thinking 50/50 might be best.
Any advice would be amazing!
Most Popular Reply
Hey Steven,
My brother and I also partner on flips in North Idaho. We're also currently splitting profits 50/50. We've done about 6 or 7 flips in the last 3 years and we don't always put in the same amount of effort on every deal. You guys just have to be comfortable with the fact that a 50/50 partnership will never be 100% fair for both, but make sure that you couldn't do it without each other.
I'm an agent and he's a contractor. We get along pretty well and it's working for now. Just make sure you have a written agreement or an operating agreement that clearly identify your roles... even though you are brothers... Sometimes the wifes and/or other friends/family won't always see all the effort you or your brother will put into each deal... when you're splitting $50,000 on a flip, it's possible your wife, or his wife could get pretty upset about who's putting in more effort. It gets complicated so make sure to be formal about the partnership.