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77
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16
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Chris F.
  • CA
16
Votes |
77
Posts

Bringing in a small stake partner who wants to live in a unit

Chris F.
  • CA
Posted

Three partners. One is interested in putting up 5% of the deal (equity required) and is willing to pay the "rent" on the unit she would live in.

  • In theory she would be entitled to 5% of the cash flow, but how does it work if she's also paying for that unit? 
  • The money she is paying on that unit would accrue in equity on an annual basis. How do I calculate how that pie chart adapts as she pays into it?
  • Does it make sense that she is entitled to receive 5% of the profits, but because she is a smaller stake partner that she also has to pay the market rate for that specific unit?
  • Do all partners split costs per their equity stake or does the property pay for expenses before cash comes/goes to partners. I assume an LLC business account would hold all of these records.

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