How do you divvy things up with investors when you find deals?

[Brooks F.]

I've been having some decent success in RE, and so now i have the opportunity of having a number of people asking to give me money. I've vetted and have two people I'm willing to use their money. I'm having a hard time figuring out how to go into partnerships with them.

I've searched around and it seems like most the conversations about partnerships are either Investor + Buyer or multiple equal partners going in together. Whats the best way to do it if your NOT equal and you are the one finding deals and offering a lot of support? I read about people doing this, but I don't see anything about how they actually set up the ownership/investments.

So here's my question- in these situations, should I try birddogging and give them the deals and charge them a fee, or is that illegal/shady?

Or should I go in 35/65 with them and take a 50/50 ownership?

Or should I just take their money and offer to pay them interest?

How do others do this to be both fair for the other investors and yet make it worthwhile?

I know there's risk to going into partnerships, but I'm OK with it. None of these properties are big enough deals that I'll lose sleep over them, but I could use their money on them to make the deals happen.

[Dave Passey]

I would say to take it case by case. It sounds like they trust you and that you have a track record for success. I think that you could use any and all of the those options at various times. It all depends on the deal type and what you are comfortable handling at any given time. 

If you currently have a lot on your plate, then charge them a fee, let them handle the rest and you still make money on the deal. Congrats - you just became a wholesaler.

If you want some buy and holds then go for 50/50 ownership (or some other ratio). I know a guy that gets 50% ownership without putting any money in because of the agreement that he has with his funding partner. Don't feel like you have to put up cash to get an equal share. Maybe you arrange and handle the management of the property. 

If you have a good deal and want to flip it and keep it all to yourself, then don't feel bad about using the money and pay them interest. Congrats - you just found your first private money lender.

The point is, depending on what you have going on at the time and what you feel like you can handle will determine what is the best course of action for you to take at any given time. It seems like you have an awesome situation in front of you with many options. All of them are fair and legal and will all have a spot in your funding options "toolbox".