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Updated almost 9 years ago,
How much should an investor make?
Here's the scenario:
Rebecca and Rachel buy a property for cash each putting 50% into it. Rebecca intends to buy out Rachel within 6 months of the sale.
The property costs $55k. Repairs $10k. They put in $32.5k each. Property rents out at $900/month. ARV $80k.
Rebecca gets financing at the LTV 70% and holds onto the property as a rental.
What return should Rachel get on her investment? They're sisters so Rebecca wants to be generous.
Also, would I be correct in thinking that until she buys Rachel out that they should be splitting the profit from renting it?