Partnership newbie! ADU investing

[David Maldonado]

Whats up BP community!

I have decided to build a detached ADU for my property and will getting funding from a family member as my investor/partner. With this new CA SB 13 the cost for the permit will be cheaper and will not pay impact fees (maybe some impact fees if I decide to go above 750 sq ft). I have a GC quote of 60k for a 2bed 2bath unit of 740 sq feet that will have its own private entrance, yard, and laundry. The unit will rent out for $1600-1800 (includes utlities). My investor will pay for it all and I will have it built on my property. My question is: what would be a fair split between the both of us? I will provide the property, rent it out and manage it whioe he only provides the cash and won't have any direct involvement but I feel like a 50/50 split won't be fair to him because he is dropping a lot of capital in this investment. It will take about 6 years for him to make his money back and then start seeing his returns. The goal here is for both of us to win and I don't think refinancing is a viable option to pay him back sooner due to ADUs still being fairly new to the market. What do you guys think?

[Orlando Perez]

@David Maldonadoalfaro

Best of wishes on this venture. I think your GC quote is a little low? What does the 60k cover? Make sure it is clearly written out. So, just to give you a comparison and range. We've had GC quote us from 160k to 300k for a 1200 sq ft 3 BD 2 BA detached ADU. if that 60k is legit and it ms clearly written out that's how much it's going cost, that's great. Just confirm that you get what you're paying for.