Equity Partner - Deal Structure

[Chris Marangoudakis]

I am looking to enter certain partnerships with Equity Partners. My company would be responsible for finding, renovating and reselling the properties and the Equity Partner would be funding the purchase of the property + the rehab costs. I could possibly kick in some money so that I have some skin in the game, but right now we are looking for the money partner to finance 100%.

What would a fair deal structure be between me and the money partner be? Let's say he was coming up with 150,000 (property) + 60,000 (rehab) for a total of $210,000. What should his return on initial investment be? What about the profit distribution at the completion of sale?

New to the site and I love what I see so far! Thanks for the help...

CKM

[Karen Margrave]

The biggest question is, what is your experience? Do you know how to do the actual rehab? Are you an agent? What will convince a partner that you know how to choose properties, and can do the work? Those are the things a partner will be looking at, along with going over all the numbers for themselves.

If you can find someone to do a deal like that with you, and you are inexperienced, expect to get less than 50% of the deal. After you prove yourself, you can start getting a larger cut. You have nothing to lose and everything to gain, the money partner has everything to lose.

Any of us would be interested in doing a deal where someone else puts up 100% of the money and let us do the rest :)