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Updated over 8 years ago on . Most recent reply
Fair deal?
I am just starting out and I'm thinking of investing in a property with a friend's private money. I kind of pitched the idea to him to see what he would think. I proposed we split the down payment and closing costs 50/50 in exchange for a 50% stake each in the equity. Since I would be doing all the work and he would just be providing money, I suggested we split the cash flow 25/75.
Now I'm wondering if that sounds fair or if I'm being too greedy? I guess partners can decide whatever they want between themselves, but is there a such thing as "typical" here?
Most Popular Reply
Why wouldn't you just get him to loan you the money at a set rate of return? Rate of return and safety of the investment are what will matter to him. You need to retain control of the deal if you are going to manage it. You could always give him a lien if he is worried about you selling without making him whole.
Find a real estate attorney and buy him lunch. Ask him how to structure the deal.