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Updated almost 6 years ago,
Fix & Flip Profit Split Advice
Question for ya. I'm trying to be the equity partner on a fix and flip joint venture with two guys. They are both, apparently, ****-hot at what they do. The first person is ostensibly great at finding and analyzing deals, sweat equity, and just general wisdom about properties. He would probably be getting the insurance set up, coordinating with Realtors, etc. The second is the best when it comes to inspecting houses and running subs.
I am wondering, should I be going for 33% of the profit, 40% of the profit, or still 50% even though I am only providing money?
I think the chances of going below $0 in profit is pretty slim. But my opportunity costs are lending in the Charleston SC area for about 14% annually (well, maybe including a 25% "stale" factor with the capital), but probably no more stale than the flip capitalization strategy.
Advice please!