Buy and Hold Partnership Agreements/Profit Splits

[Anthony Wick]

Scenario: two people agree to a buy and hold partnership agreement on a multi family property. Both partners are going to put in the exact same amount of cash. However, one partner is hands on, lives in the area, and will be doing all the ground work; to include securing the financing, finding the deal, and self managing the property and everything that comes with that. The other partner is out of state and is supplying 50% of the cash, but nothing else. 

Question is, what is a fair split of the profits (monthly rents/revenue and potential profits on sale)? Or, how would you write up this deal to be "fair" to both parties?