Newly Built Multi Family 2-8 Units

[Jon Blumberg]

Hi BP Community,

I am in the process of breaking ground on 4-5 projects of NEW Construction and had a few questions for the community. I think its best to provide this by way of example:

1. The total project appraised value is $1,400,000.00 

2. The total cost of the project with the land is $1,100,000 without any developer fees

Land is $330,000

Cost to Build is $770,000.00 

3. The equity required at closing is $100,000 

4. I can put up the equity myself but I friend of mine has been on my case to get involved in a project so I want to propose something that is fair for both sides

5. My proposal or concept is to:

A- Have my investor put up all of the capital for a 50% share in the project- he will get all his capital back after refinance 

B- Charge some form of fee- the bottom line is I got this property at a good deal and do not just want to "give" away from the value. I do see value in someone putting up the cash but I also think some form of fee would be reasonable for the work and effort I will put forth to bring this project to fruition- he will be 100% passive 

I would love any feedback or ideas from the BP community on a structure like this! 

Thanks and chat soon!