Partnership Structure (When you are bringing the deal)?

[Michael Glunk]

I am curious about thoughts/experiences of structuring partnerships when you are bringing the deal. I've heard on the podcast various numbers thrown out and that it wouldn't be unheard of to expect a 50% stake in a deal that you don't personally invest any money in, but handle everything else.

- So what are your thoughts/what have you done? 

- And how did you arrive at your percentage decision? 

- What factors do you consider when deciding the percentage breakout?

-What else did you consider that I haven't brought up?

Thanks in advance.

Mike

[Jonathan Godes]

50/50 is a good starting point for the deals I have done. I don't know that the percentage is my biggest concern, but my downside protection is. Who covers the overages? What happens to my money if the reno goes 5 months over? 

I wouldn't ask a partner who is finding the deal and doing the work to take less than 50% as I want them feeling EQUALLY as invested as me. Depending on the experience and our relationship though I usually ask for a preferred return and a personal guarantee.