Looking for advice on partnership structure (finders fee)

[Matt Kowske]

Hi all,

I'm seeking advice on how to structure a specific element on an LLC my wife are a part of with 2 other partners. We are the more experienced real estate investors and they are more skilled in remodeling work. The idea was we would buy up places that needed some work and hold them for long term rentals.

When in business with others, how do you compensate for finding deals that are significantly under market value? How is a "finders fee" typically implemented? For example -- if 1 of the 3 members happens to find a deal that yields 50k in instant equity, would that somehow be divided up unequally to give the finder a larger share? Would you do a fixed percentage of the appraised value? A set finders fee amount? 

Just looking for some ideas here -- what further complicates things is that my wife is a realtor as well, so when finding deals that are not on the MLS, how much of that is included in her commission and how much of that is an investor finding something themselves?

Our first deal proved to be very similar to this and it is causing a lot of stress between the partners trying to agree on what is fair and what makes sense. Thanks.