Need Help with investor payout structure

[Luke Hutchins]

Hello, I’m a residential real estate broker in NC,. I’ve been in the business for about 8 years now and have become a top producer in my market over the last couple years and own my own brokerage along with my business partner. I also manage a lot of properties for some of my clients. 

I’m looking to transition out of real estate brokerage and get in Multi family investing, ultimately I want to build my business on medium-large apartment complexes and have a 9 figure portfolio, But since I’m just getting started in multi family investing I’m hoping to take down something with 5-25 units for 300k-2 million to start. I definitely plan to partner up and plan to raise money from investors for any purchase price over 700k. 
one thing I’m still trying to figure out is what kind of payout structure to offer the limited partners who just simply invest their money in the deal passively. 
Do you give them a projected return upfront then you as the general partner keep the difference on what’s left over after that projected return? 

I’ve heard a lot of investors do a 70/30 split of the net cash flow and profits. (70% to the limited partners)
any advice would be greatly appreciated :) 

[Paul Moore]

Hey @Luke Hutchins! Welcome to the multifamily investment world. I wrote a book called  The Perfect Investment and I'll be happy to send you a PDF copy free if you think it will help you out. I highly recommend that you get some mentoring/coaching in the multifamily realm before doing any deals. It's critical that you immerse yourself with someone who has been down this road before. 

You could check out Whitney Sewell's podcast The Real Estate Syndication Show and also Joe Fairless' podcast. There are certainly some BiggerPockets podcasts to check out as well. You may also want to get It's a Whole New Business by Gene Trowbridge. This is a book about syndication and how to structure deals, etc. Good luck and happy investing!