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Updated over 13 years ago on . Most recent reply
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What is a fair percentage for this partnership?
Our team currently works with private investors flipping, wholesale deals, etc.
I recently had a friend refer an investor/funder to me who agreed to match my other equity partners with a 50/50 split on the net.
Now, my friend is requesting a 50/50 split on my profits. I have a partner and several employees working to do the type of deals we do. I am working 60+ hours a week and have my own expenses associated with getting deals, analyzing deals, and executing deals. The reason I am trying to work this out is because the investor has a fund of $30 million dollars to flip properties, buy notes, buy in bulk, etc. However, they will of course start with a few deals so I do not want to give up half of my profits to my friend when I have other investors to use.
My friend is going to be doing no work, so essentially he just brought the fund to me.
Thank you for the advice!!
Most Popular Reply
This is brokered money. The typical payout by the operator on a brokered deal that is a Joint Venture is two points and the broker is out of the picture.
Because he's your friend you might consider a residual of 5% of your net profits (maybe 10% but no more than that if I were you).