All Forum Posts by: Maggie D.

@Joe Edwards 100%!!

@Alberto Nikodimov

We do this exact structure with our investor and it works beautifully for both parties. We do 90/10 capital split and 50/50 ownership. We handle every bit of the work + find the deal and our investor is only capital.

I’ve heard seasoned investors scoff at this structure because why would the capital investor not do the work themselves or hire it out, then they’d be 100% owner? Because that’s assuming the capital investor a) has the knowledge and skill b) has the time to do this c) understands the market. If they do and have the time, great! Then maybe for them it wouldn’t make sense to partner. That’s not everyone’s position.

You’re bringing the value here if you’re doing the work and finding a great deal. Money is not difficult to borrow. IMO I think it’s more adventurous for the capital investor than it is for you. You’re making it happen and they get their money back after the cash out refi then get 50% ownership and revenue split. What a deal! I actually hope to be in this position one day! For me personally, I’d never take anything less than 50% and it might make more sense for you to do hard money anyway and retain full ownership. :)

@Daniel Dietz

Dan thank you for such a thoughtful response! I love hearing how other people are finding success for everyone involved implementing this strategy! We do EXACTLY what you do (minus the rehab part). The rehabbing portion of this equation has been lucrative for us since once we do a cash out refi, we get all our initial capital back, plus some, keep 20% in and then use the extra money for another property. Good luck with your new project!

What's up Aaron, thanks for your response! I've actually found the exact opposite. Not rare at all. That 50/50 deal structure (sweat/capital) is pretty common and can be a more advantageous deal to the capital investor. They put zero energy in, and after the rehab they get their capital back in full and then get 50% equity and 50% profits on the property. Way better than the stock market or parking your dough in the bank. 

I totally hear you though, for someone like you who is knowledgeable in real estate, knowing how to hire the right people to do the work etc, and has the time, I can see where that wouldn't make sense. 

Hey everyone!

I'm a rental property investor where we've used a standard 50/50 ownership and profit split with a capital partner on our last 3 properties. All rehabs. We are all the work, the investor is the capital. We put in 10% capital and the investor puts in 90%. This has worked out wonderfully for us. 

I've had a few friends who have seen what we've done and want to start doing deals with us, but i'm unsure how to best structure it. They all want to do 50/50 capital split but I'm not sure if that's the best way given we may be doing a lot of the work? Here's the two scenarios we're in:

Scenario one:

3 people split all costs down the middle on a property. For the work... I'm going to be analyzing markets, finding the deal, setting up insurance, LLC, loan, realtor, handling title, ongoing maintenance management. The other party handling the rehab and furnishing. The third party... her work responsibilities TBD.

Scenario two:

2 people split all costs down the middle on a property out of state. She finds the property, I do "the work". 

Looking for some advice on how some experts out there might recommend a deal structure and why, so it feels great for everyone!

@Paul DeSilva yes! In escrow now and planning a few more by end of the year. For us it’s just about finding deeper deals in the right market. So far so successful but being hyper aware of everything in flux.

@William Brock whoops just realized you gave an update above. Thank you so much!! That is incredibly helpful. Maybe we'll be neighbors soon. :) 

@William Brock & @Kevin Noell i'm interested too! 

William thanks so much for sharing. Curious to hear how your STR in Canyon Lake is doing. I'm looking at a few neighborhoods in Hill Country and am having a hard time deciding which one to move forward with.

Hey guys, upon a few Bigger Pockets searches for a question, I came across this thread.... although 3 years late. :)

@Stewart Wyne - curious to hear how this panned out for you? I've done a few rental deals using a partner. I'm the work (sweat) and partner is capitol. We split 50/50 equity and revenue after the partner has been made whole. 

@Michael Plante - Thanks for sharing, interested to hear more. What are the loan terms for this as far as how long do you have to pay them back + interest? 

@Jo-Ann Lapin that would be great Jo Ann, thank you!