Investing in real estate with a partner

[Nicholas Pfleghaar]

I am partnering in purchasing rental property with someone who will be finding the deals and managing the rehab and doing the property management.  My role is to purchase the property through conventional finance and to provide the down payment.  What is a fair equity split is a partnership like this? I am trying to gauge what the standard in the industry is?  Any help is appreciated!

[Aaron K.]

@Nicholas Pfleghaar to be frank if you enter into this type of deal there isn't much benefit to you, all the services you say the other person would do could be hired out and you would keep 100% of the equity.  As a side note it is generally rare to find someone who is great at finding deals but also doesn't want to put any money in them to have a greater equity share, they may well be a beginner with little more experience than yourself and at that point you really have to ask yourself what you are paying for.  As for managing a rehab as long as you get a scope of work from a GC they can manage the day to day and you can spend a couple hours inspecting.  Property management in many parts of the country is 10% of rent but if they screw up you can switch companies, that is a lot harder to do if your property manager has equity in the property.