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Updated over 8 years ago, 04/29/2016

User Stats

3
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0
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Bryan Lawless
  • Atlanta, GA
0
Votes |
3
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Typical profit splits for Rehab projects?

Bryan Lawless
  • Atlanta, GA
Posted

My wife and I have money that we are considering investing in real estate. I know a guy that needs funds to complete rehab projects. I'm very new to this field and I need information on profit splits. I am considering the following scenarios:

1. I fund the purchase of the house (as an equity partner/silent investor), and my friend funds the renovation. Let's say the house is $60,000 (from me) and the renovation is $15,000.00 (from him) - what's the typical or fairest way to split the profit when he finishes the renovation and sells the house? My friend is also a realtor and an appraiser.

2. I fund the entire deal - house purchase and renovation (as an equity partner/silent investor) and my friend handles all of the renovation work (hiring contractors, overseeing schedules, etc.).

What is a typical profit split in a situation like this? Should it be 50/50? Or something different? I just want to do the right thing and be fair for both parties. Thanks! 

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