How to structure short term rental deal with multiple investors

[Pablo Flores]

What is the best way to structure a deal with two other investors? Hypothetical scenario: Each investor is contributing 1/3 of the capital needed for the deal. However, I would be the one finding the deal, signing the loan, and managing the property. Two other investors would just be contributing money. I was thinking of keeping 20% equity for “syndicating” the deal and managing it, and opening up the other %80 equity for however much money every investor puts in. Looking forward to your guys’ opinions.

[Jon Crosby]

@Pablo Flores Lots of ways to do this, but if you have 3 people and you are managing partner as well as contributing capital then I would do an LLC with a 20% cut for the managing piece, then 26.66% for each capital (limited partner). You will be both a limited and managing partner and your different shares will be treated as their own. The limited partners shares will be preferred shares and you might want to setup a waterfall type scenario for your management shares where you get different profits based on your performance results. But you don't have to if everyone is happy with just splitting it up as described above and trust you will do right by their money especially since you have your own at stake as well.

Best of luck!