Updated about 6 years ago on . Most recent reply
Bringing in a small stake partner who wants to live in a unit
Three partners. One is interested in putting up 5% of the deal (equity required) and is willing to pay the "rent" on the unit she would live in.
- In theory she would be entitled to 5% of the cash flow, but how does it work if she's also paying for that unit?
- The money she is paying on that unit would accrue in equity on an annual basis. How do I calculate how that pie chart adapts as she pays into it?
- Does it make sense that she is entitled to receive 5% of the profits, but because she is a smaller stake partner that she also has to pay the market rate for that specific unit?
- Do all partners split costs per their equity stake or does the property pay for expenses before cash comes/goes to partners. I assume an LLC business account would hold all of these records.