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Updated almost 5 years ago,
Unique request from GM/team member
I am new to real estate and I am already facing a very interesting situation. Please advise
Background;
I am a father of four wonderful kids. Ages 9,7, 5 and 2. Last year, my wife and I decided to sit down with our financial
adviser to plan for our retirement and most important, the college funds for our 4 kids. Even with a very busy practice
and my wife working 2-3 days a week, the numbers do not look good so I decided to explore ways to create passive income.
I started with Robert Kiyosaki's "Rich Dad, Poor Dad" which led me to Ken McElroy's "The ABC's of Real Estate of Real Estate Investing"
which led me to Brian Murray's "Crushing It in Apartments and Commercial Real Estate" which led me to BiggerPocket where I am still
learning everyday.
Honestly, this real estate thing has become an obsession. It consumes my every thought. I catch myself thinking about RE while examining my patients..very annoying.
I figure the only way to calm this obsession is to jump in with both feet.
My goal is to start out small with SFR as rentals (3-5 within the next 6 months) then move to apartments by the end of 2020.
I planned to BRRRR out of state since we currently live in southern California. I have a 'superstar' team put together and ready to go.
The situation;
Our general contractor happens to be a very good friend and an experienced real estate investor in the area. He is willing to help with our new business venture but he's not sure what to charge for his time.
In addition to taking care of the renovation-including design layout he will also be
1. checking out the property with the real estate agent to run renovation estimates and making sure it will be a good rental.
2. coordinate all permits and license with city
3. even offer to manage the property without the usual management fee
For his time and effort, he is proposing that we give him part ownership of each property. He doesn't want any of the passive income from the properties. He just wants a percentage of the sale of the property when it's sold in the future.
I like his proposal but I just don't know what the fair/appropriate percentage should be?
Please help.