Profit Spitting: Needing Advice Please

[Grace P.]

I am sure this gets asked all the time but I can't seem to find our situation in any posts. Okay my husband and I have experience rehabbing, flipping, renting etc... We have partnered with some friends (another couple) who have no experience. We created an LLC and are in the process of selling the first flip with them. On this current deal each couple put in 50% of the capital and plan to split profits 50/50. We are all doing the work ourselves and keeping track of our hours. We will be compensated for hours worked after the sale. My husband who has the most experience will get a higher hourly wage than the other three. My husband and I feel that for the next flip we would like to adjust the profit splitting to 60/40 or 65/35 as we have mostly managed the project, did most of the work and carried the burden of the stress. They do work and are not silent partners but they need to be guided through the process. We don't want them to feel cheated but we feel we should be compensated for management of the project. What do you guys think is a fair split?

[J Scott]

Originally posted by @Grace P.:

I am sure this gets asked all the time but I can't seem to find our situation in any posts. Okay my husband and I have experience rehabbing, flipping, renting etc... We have partnered with some friends (another couple) who have no experience. We created an LLC and are in the process of selling the first flip with them. On this current deal each couple put in 50% of the capital and plan to split profits 50/50. We are all doing the work ourselves and keeping track of our hours. We will be compensated for hours worked after the sale. My husband who has the most experience will get a higher hourly wage than the other three. My husband and I feel that for the next flip we would like to adjust the profit splitting to 60/40 or 65/35 as we have mostly managed the project, did most of the work and carried the burden of the stress. They do work and are not silent partners but they need to be guided through the process. We don't want them to feel cheated but we feel we should be compensated for management of the project. What do you guys think is a fair split?

Nobody outside of your group can tell you what a fair split is.  If you're splitting based on the knowledge, experience and work each party is doing, then you need to sit down and all come to agreement on the amount of knowledge, experience and work you're each bringing to the deal -- and then split accordingly.