Funding Deals / Partner Expectations

[Robert Harvey]

Hi All,

First, thanks for the forum and tremendous expertise and support. I am doing a lot of reading and research here while working full time and while real estate investing seems like a daunting challenge I am looking forward to getting started. 

The question of the day is how to approach potential investment partners. I have a network and will be having those conversations but what the books don’t teach, and what I haven’t found here are specific terms. 

What is customary, what is expected, fair, etc. ? for example, if I partner with someone who brings a portion of the closing costs, and they want a portion of the equity, what should that look like. 

I appreciate many feedback. Feel free to add any other information you think needs to be considered along the partnership lines. 

[Drago Stanimirovic]

Hi Robert,

When partnering with someone, the terms should often depend on what each party is contributing, whether it’s money, time, or expertise. If someone is bringing part of the closing costs, it’s common for them to receive a portion of the equity that reflects their financial contribution compared to the overall deal. This could range based on how much risk and work you're taking on versus their financial input.

The key is to be clear and transparent about expectations, like how profits will be split and who is responsible for what. It’s also important to think through what happens if one partner wants out or if unexpected issues arise. If you need advice on financing or structuring deals, feel free to reach out!

Best,

Drago