All Forum Posts by: Jackson Long

Okay guys, I don't know if I am asking the wrong questions, asking in the wrong place, or asking something so dumb that people can't type because they are busy rolling their eyes...

So moving forward I am going to bring new investors into my projects.  I've done a great job for my current guy, and he will stay with me, but I want to do my next round with friends and family.  Basically letting them get some of the benefit of what I am doing before I go fully mercenary and take over the world!  Well, maybe not that, but still.

They will put up the money. Depending on the deal they might hold the financing as well or that might wind up being the LLC for commercial stuff. They will need ownership, equity, and cash flow. I will do all the stuff (as I am now). I will identify opportunities, execute against them, put processes in place, etc. I will need ownership, equity, and cash flow.

The stuff I've read about so far typically seems to have partnerships or investors that get paid out rather than maintaining an interest.  For this round- the friends and family- I want them to build wealth with me.

What are some fair structure ideas?  I will bring experience and do "all the stuff".  They will write checks, sign things, and get checks in the mail.

Loosely, I think they should expect CoC equivalent to "ye standard" portfolio investment. So what is that? 6? 7%? then whatever equity growth they get... It seems like this would mean that any cash beyond 7% was mine- so if I was getting 14% off a property it would be a 50/5- deal... And that might work for the cash part- but what would the equity split be?

Mostly I am stuck trying to figure what the value of "the money guy" in a buy and hold is vs. the "make it happen guy".  Then I could analyze (god that looks misspelled) if those ratios would provide a reasonable return for the investor...

Anyway, I am basically thinking myself in circles now and would really appreciate some input. 

I am probably pre-rationalizing to justify a giant apartment in a war zone. :)

Could you buy an apartment in Da Hood, and offer discounts to people who work in law enforcement to indirectly curb crime?  Would it maybe need to be in the form of a work trade where law enforcement was an employment criteria?  Or is this just verboten?

This sounds like a great opportunity for you to start a blog!

So my partner and I are wrapping up the loose stuff in our deal and I am preparing for my Next Awesome Stuff.

I am looking to work with people who want to start generating passive income through rentals by helping them identify, purchase, and run rental properties.  I want to keep a portion of the ownership.  What seems like a good split?  This would mostly be working with people I've existing relationships who have lives that just aren't conducive to making this happen on their own.  I would offer basically the same service I do now- except now I've experience and the concept is proven.  All they have to do is sign stuff and I make all the rest of it happen.

I *WAS* that person a couple of years ago and no property management company would work with me.  I assume that is the "standard answer"- find another candidate. :(

Interesting.  Thank you everyone.

It is pretty fascinating to learn all this.  I think the bits of negative in my reaction did come from a place of, "but that is part of MY job!" thinking.

Anyway, thanks again for all the input guys!

Can you tell us who your provider was/is?

Also @Kyle McCorkel Am I reading correctly that you are getting 15-17% return on investments through a turnkey provider?

Hey guys,

So I just learned about turnkey providers fairly recently and I am fascinated, impressed, and kind of turned off all at once.  I was hoping to get some conversation to help me think through this and maybe decide how I really feel.

Firstly, I am like- whoa that is badass I wanna do that!  

But then I am like- buuut if I am going to find, buy, rehab properties and control a streamlined property management operation...  Why wouldn't I want to own the houses too?

At the same time I keep thinking...  I buy moderately distressed properties and fix them up to be rentals...  I generally don't buy flipped properties because there is a big chunk of value there that I am giving to the flipper.  I want him to be successful- I just don't want to pay for it.  *I* want that success.  I feel that way about property management too, but I know I need to scale out of this (look for posts on THAT subject later).  I also feel like I create value by identifying great properties...  All of those things I am paying the turnkey person to do- so giving away money.

Help me with some more thoughts and/or context so I can properly frame my thoughts please!

Thank you,

J (turnkey folks are welcome to post here too- I want to understand so I can decide)