How to split profits?

[Riley Holt]

Hello BP. I am starting to get my ducks in a row and plan to invest in rentals and maybe a few flips here or there. My brother who lives in CO will be my hard money lender. He will cover the down payments and rehab costs while I find the properties and manage the rehab/repair. I plan to use a management company for the tenants because I'm too soft. So my question is this. How do we split profits with rentals? I have a fair idea of splitting the profits on flips because its a one time lump sum. But how would I do that with regards to rentals? Any and all feedback is appreciated. 

[Account Closed]

Originally posted by @Riley Holt:

I could understand that. I guess my hang up is this. Say we rent a property for $900/month. After all is paid up we get a cash flow of $200/month. But say there is an issue that needs repair or something. How do we address this kind of issue?

You make a reserve fund from the monthly rent until it hits X amount.  Then after that you get to start taking profits from the property.  

For myself I leave all money in the business account to cover everything for the repairs and what not.  At the end of the year I take out some money if there is any extra as a treat.  I don’t need the monthly cash flow but I do like the whole idea of a Christmas bonus for my hard work all year.  I will eventually take the profits and buy more rentals with it.  Make it a self sustaining machine.