Structuring a Partnership for a Deal

[Eric Rosiello]

Hi BP community,

About six months ago I posted on these message boards asking for advice and recommendations regarding property management. I am happy to report that after an extensive interview process I hired a property manager that was recommended by you guys! And thus far, working with the property manager has been a pleasure and has done wonders for my business.

I’d like to reach out to the community again for advice when partnering on a deal.

The situation is this:

• I am looking for an investor to put down 50% of the down payment (10% of the property value).
• I would put down the remaining 50% (10% of the property value).
• I will supply the renovation funds (10% of the property value).

I’m looking for a 6-8 family in the areas surrounding Boston.

How would a deal like this be structured? Looking for any and all ideas from those with experience.

Thanks all!

Eric

[Hai Loc]

If it was me I would ask for 25% as the project manager/asset manage fee

75% goes to capital investors

The % that you mention actually works out

Capital invested is 30% of property where you 20% and your investor 10% contributed 

So out of the 75% capital split your investor will get 25% and you 50%. Plus you get 25% management.

If you feel like you did an awesome job finding an excellent deal and capable of doing a nice reno I would even ask as high as 40% as a management fee if you can present the investor a plan with high potential margin