How to split when one partner puts up all the credit and funding?

[Andy Lu]

In 2007, a partner and I decided to try flipping a house for quick profit (It was worst timing ever!)

At the time, the purchase price = 290k, rehab = 10k, and then thinking we can flip the house for 340k.

The house was solely under my name as my partner doesn't want to have his name on it at the time, thinking this will be a quick flip. The property was financed with hard money and my HELOC from my primary residence and we split the rehab cost.

The market tanked during the rehab time frame as we couldn't sell the house at all and underestimated how bad the market condition was (early 2008). So we decided to rent the place out. At the time, we were luckily enough to get HELOC on the property itself and that was able pay off the hard money and most of my HELOC from my primary residence.

Fast forward 10 year, we are selling the place as the property had climbed back up to ~360k.

So what will be cost for managing the property for the last 10 years and also the credit that I had to use as the property was solely under my name.

Thanks in advance for all the feedbacks!

[Bob Okenwa]

There should have been an operating agreement in place that defines profit splits, but if there isn't one, 50-50 is usually where most people would start. Since you put up the credit and HELOC money from your personal residence, it'd be fair if you had a higher split of the profits since you incurred more of the risk. Not sure what kind of relationship you have with this partner, but profit splits should have been ironed out well before any action was taken IMO.