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Updated almost 2 years ago on . Most recent reply
Question regarding CoC ROI with partnerships
Hi everyone! First time posting in the forum. Love all of the other topics - super informative. My question is regarding partnerships and more specifically partnering on rental properties. When doing a 50/50 partnership, what CoC ROI is generally acceptable? 10% CoC ROI is great, however when splitting profits that obviously gets cut in 1/2. Is this a problem? Are we essentially promoting the safety of the investment with the upside of potential appreciation? Thanks for your time!
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Quote from @Mason Beyer:
Hi everyone! First time posting in the forum. Love all of the other topics - super informative. My question is regarding partnerships and more specifically partnering on rental properties. When doing a 50/50 partnership, what CoC ROI is generally acceptable? 10% CoC ROI is great, however when splitting profits that obviously gets cut in 1/2. Is this a problem? Are we essentially promoting the safety of the investment with the upside of potential appreciation? Thanks for your time!
A ROI wouldn't get cut in 1/2 in a 50/50 partnership since the "I" would be cut in half as well, you are reducing both the numerator and denominator by the same amount so it doesn't change CoC
i.e.
By yourself, invest $100 and make $10 = 10% ROI
With partner, invest $50 and make $5 each = 10% ROI