Splitting rental property with private capital investor
Hey everyone, new to BP and Brandon has fully convinced me into purchasing multifamily investment property. I'm working my first deal (woo hoo!) with a private capital investor on a small duplex. My partner is investing in the cost of the property $140k as a silent partner and I will be managing the property. We are collectively purchasing under a newly formed LLC. How do we split profits?
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I'm currently working on a deal and have agreed to 25% of equity and cashflow for my leg work. Once I more substantial track record I'll move to 1/3 and eventually 1/2. I think it all depends on the investor your working with, the returns, and what they are comfortable with.
If you're only making an 8% return on the 140k they might only be willing to split it 72/25 to fund the deal. If your returning 20% 50/50 isn't a bad deal. It all depends on the circumstances.