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Updated over 1 year ago,

User Stats

20
Posts
14
Votes
Iliya Muzychuk
14
Votes |
20
Posts

Sweat equity valuation for permitting and remodeling a commercial building - Help

Iliya Muzychuk
Posted

Hi, 

As an architect, I was approached by the building owner to help increase the value of their building and create a cash flow. The current value is 500k (the Owner has 400k ballon in 18 months), and with 150k remodel I believe I can generate about 5.5k a month gross income. I am going to take on the development, permitting, contracting, and marketing of the building to create two live-work spaces. 

Since this is my first type of sweat equity deal, I have difficulty realizing what percentage I should take and from which portion (Gains, Full building valuation, Cash flow). 


I have two options in this scenario: 

1. Sweat equity only, my labor for %. 

2. Paying the construction costs as cash. 


Wondered what the forum would think about this deal and how should I structure this distribution. I am confident on delivery but pretty new to being on the developer side of things. 

Help would be greatly appreciated! Thanks and have a great day! 

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