Partnership on Short Term Rental

[Trish Mccoy]

 I am looking to buy a short term rental  Purchase price is $450K, I am putting up all the cash approx $100K, which is approx 22.2%.    We both will go on the loan and spilt work 50/50.    I was thinking of structuring it were I get 69% equity and profits and they get 39% - does this seem fair ?    Or maybe I should just take 61% equity and we spilt profits 50/50 on cash flow?       Any suggestions or ideas? 

[Ken Boone]

Yea this suddenly moved from real estate talk to personal matters... oooh.. Yea just personal opinion and you know what this is worth. I would not enter into an equity deal like others have said. Until there is a solid commitment you just never know and then you would be locked up into a bad scenario. Hopefully that is not what happens but ya never know. At this point I would not even do a profit split. Instead of a guaranteed profit split I would basically set up some type of contract to hire him for his services concerning the STR and that could be tied to a split of the profit, but it would be clear that it is a hiring situation, not an ownership or partnership situation. That way if things did go south, you can simply fire him and move on. Plan for the worst, hope for the best. Hope this doesn't upset you in any way but this really moved into areas of the heart and beyond pure real estate dealings.