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Updated almost 3 years ago,
Giving Investor Client Commission in exchange for equity?!
Hey Everyone, so I ran across Rup Singh on youtube and he gives some insight on a neat equity position on deals in exchange for Real estate commissions! I like the idea and have pitched it to a few of my investor clients and its paid off however I do have a couple questions on structuring the JV deal.
So the concept is being that the investor wants to be hand-off or out of state and can't really be as involved in the project that's when I step in....ill give the investor my commission on the deal and ask for maybe 5-10%+ return being that I will take the deal from A to Z. Handling the contractors, property managers, and all the day to day operations. also on the sale side of things ill be able to list at an aggressive reduced commission as well to save the investor even more money. this will work well with flips but my 2 questions are:
1.) is the 5-10%+ return too low or no? Especially if I'll be handling everything?
2.) how can I structure this for an investor wanting to do LTR? Do I get a percentage of the cash flow or just equity on the deal?
I want to make sure I'm doing things correctly but not giving up more than I need to if I don't have to.
Thanks in advance and hopefully I explained this correctly.