Is this a fair deal?

[Jeremy R. Henley]

I have a potential 100% financed deal including the rehab and I am curious what a fair profit split would be to compensate the investor. The quick deal summary is a SFR flip that should take about 2 months to renovate and then about 30 days to sell here in the San Diego area plus closing time of 30ish days. We are contemplating doing a limited partnership where the investor will supply the funds for purchase and rehab and I am bring everything else, my crews, my knowledge, the deal, my management, etc. The investor has a LARGE line of credit so we are considering the interest on the line part of the expenses as well and would potentially split the profit 50/50. Generally speaking am I being to generous, on par for industry or getting lucky with the deal. I am not a rookie but also would not say I am veteran with 100s or more flips under my belt. Thanks for any input.

[Cody L.]

Originally posted by @Jeremy R. Henley:

I have a potential 100% financed deal including the rehab and I am curious what a fair profit split would be to compensate the investor. The quick deal summary is a SFR flip that should take about 2 months to renovate and then about 30 days to sell here in the San Diego area plus closing time of 30ish days. We are contemplating doing a limited partnership where the investor will supply the funds for purchase and rehab and I am bring everything else, my crews, my knowledge, the deal, my management, etc. The investor has a LARGE line of credit so we are considering the interest on the line part of the expenses as well and would potentially split the profit 50/50. Generally speaking am I being to generous, on par for industry or getting lucky with the deal. I am not a rookie but also would not say I am veteran with 100s or more flips under my belt. Thanks for any input.

 I wouldn't say you're being generous.  He's funding the whole thing.  He has ALL the risk.  It's risk that determines return.   If I were funding a deal for someone I'd want them to have at least 20% of the cost, then I'd fund the rest and split the profit.  I don't know that I'd finance 100% for any % but I wouldn't for 50%.

If you're still in the starter stage where you don't have your own capital, be happy with whatever you can get IMO.  If you can get 50%, then well done.