Investor · Austin, TX · Member since 2015 · 43 posts · 25 votes
Hello BPer's,
I was wondering how others are valuing your contributions in a partnership or joint venture deal. Specifically, what percentages of a rehab deal for example, is fair regarding who does the financing, who oversees the repairs or manages the project, who finds the deal, who has the knowledge/experience... How have you done things before or what are your thoughts? I really appreciate any feedback. I guess whatever you agree to with your partner/s is what the values are, but as I start getting involved in partnerships I was just wondering how some of you generally value your share of the deal. Thanks!
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
9y
Typically it is based upon the dollar costs. If you are putting in sweat equity is not a capital contribution for your tax return. Many people forget this point. It can make losses not deductible in the beginner for the partner who did not bring any money.
Often you will go 50/50 for that type of deal where one brings money other does the work.
Thanks for your feedback Steven. Here is a better example:
I will be partnering with some wholesalers, since I don't really have the time to dedicate to finding deals. What do you think is fair if I would be doing the financing and the rehab? What if we split the financing and I did the rehab? They are bringing the deal, but basically we are partnering and teaching each other our specialties. Mine= construction, His=marketing