Percent ownership in a joint project (sweat equity vs. cash)

[Anca Lunn]

I have a partner who is willing to put in 100% of the cash up front for some properties we are looking to buy, rehab and either sell or rent. I told him I would be willing to put in sweat equity. The question is - does that mean that we would go in 50/50? Is sweat equity worth as much as cash or less? I have been told less, but I'm not sure how to value it and what would be a fair assessment for both of us. Any insight would be very much appreciated. Thanks!

[Brian Pulaski]

How much money and how much sweat equity is being discussed here?

Is he putting up $100,000 and you are doing most of the work on a complete gut renovation, saving your team thousands on labor/management? If so, 50:50 sounds good.

Is he putting up $500,000 and you are willing to paint some walls for the property, then I'm not sure what percentage, but if I were the money partner I would offer you a little cash and do the deal myself.

It is very case by case on what the split would be with one being the cash partner and one being the "labor/sweat equity" partner.