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Updated almost 6 years ago on . Most recent reply

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What is fair distribution of a profit from a flip deal.

Posted

Hello everyone! Working on my first fix and flip deal with a partner. He brought a deal (through his contractor). I brought an investor who finances the cash we need for downpayment/closing cost (at a low rate of 8% only, no points). I also found a hard money lender who will finance the rest what we need (i understand it's not that hard to find though). 

How would you distribute the profit between 2 partners after we sell the property and pay off our passive investors? 

My partner proposing 90% of the profit to him and 10% to me with both of us putting zero own money in the deal and only using my investor plus hard money.

Or if we borrow less from hard money lender, keep my investor in the game, but I put $20k and my partner put $100k. He is proposing 20% to me and 80% to him. 

I'm not greedy but I want to learn how to play fair in that kind of a deal. I feel me bringing an investor at a lower rate has more value than 10%. 

All your opinions will be appreciated! 

Kat.  

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