Need help deciding fair split for partnership

[Ross Zachs]

Hi All, Have done several single family house renovations for personal use and vacation rentals. I have a good friend who wants to be a sole investor in my new flip project. I want to be fair on how to split up any profits. He will put up all the cash for purchase and Reno costs. I will find and manage project. If both of us are happy at the end, the intent is to continue as partners on future projects. 1) what should the split be? Should he get more of the profit since he is the sole money person?2) Should the split change after first project? 3) What other key details should be covered in this agreement? Thanks for any help!

[Jon Holdman]

Typical profit split between a money guy (who puts up ALL the cash) and rehabbrer (who does ALL the work) is 50/50.  That assumes the rehabber is not getting any cash out of the deal except the profit split.  If you're taking an hourly rate or some such for your labor, that would come out of your 50%.

But, as @Karen Margrave its really whatever you negotiate.  A money partner is typically more expensive than hard money.  The risk is higher because the rehabber has none of their own money in the deal.

When investment with friends, be prepared to lose that friendship.