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Updated over 2 years ago on . Most recent reply
How to split profit?
I am planning to invest in a property with 2 other persons. I will bring 42% of capital. Person A will bring 42% of capital and Person B will bring 16% of capital. Person A will also do all labor work i.e buying and renovating the property. How should we split the profit? Should we estimate how much labor would cost and add that to person A's capital? And then split the profit based on % contribution?
Any advice would be appreciated.
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I'd pay person A the same as you would a contractor for renovating the property. The exception being buying the materials. For expenses split everything in the same ratio as you are putting the money into and (42:42:16) and when you sell it, do the same with the profit. make sure you have a plan going in.
you say person A is buying it-do you mean finding the property or it will be in their name? Hopefully the former.