So I walk into a local store and meet the owner (super nice guy, late 50's) and get to talking to him for a while. Turns out he's a REI as well as a business owner in his hobby/trade. He's been in RE for the past 30 years.

I asked him how he got started in real estate since it’s something I wanted to get into (mainly multi family) and he said he had an investor that would pay for everything up front while he would manage it. They would do a 60/40 split on each property. He would do this over and over until he had enough cash to start using his own money to buy properties. He said hes good at 2 things and that’s what his business is and real estate and in all his years of being in it he’s never lost money on a real estate deal.

He told me if I’m ever interested he’s always there and he’d love to do the same with me as he’s always looking to spend money. He would put all the money upfront and I would manage the property. I told him I’d love to have that opportunity!

However, I don’t even know the “rules” for a 60/40 split. I didn’t want to get into the weeds of how the deal works and look stupid, what he expects of me (all the contract stuff) after the 2nd time meeting the guy so I figured I’d go home do some research and come back to him. From what I’m gathering it’s strictly buying then renting. No major flipping involved. It seems like a pretty common and straight forward deal but I wanted to hear how it normally works from you guys…?

Some questions I have -

- What does he expect of me?

- Why wouldn’t he just buy a property and let a management company manage it for a 10% fee?

- Am I supposed to find the deal?

- Wouldn’t he be a better candidate of finding a deal with his experience?

- Do I pay for repairs?

- Is he buying the property with cash? If so is part of my 40% going towards a house payment?

These might be questions for him but I wanted to see if there was a norm on how to structure a 60/40 split. I’m sure he has the logistics figured out I just wanted to learn a little bit about what I was walking into. Any advice is welcomed!

Charlotte, North Carolina

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