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Updated over 5 years ago, 09/23/2019
Profit split for a flip with 4 investors
Me and group of friends who want to get into learning how to flip wanted to partner in a residential foreclosure deal. Not sure how to determine profit split since the roles of each person is different. Investor A and Investor E is doing all the work and paying for the rehab costs. Investor E has the bulk of flip knowledge and experience. What is the proper way to split? I was thinking a 70/20 in which Investor A gets a return on the profit of 40%, Investor E gets a return of 37%, Investor B and C gets 8% ea return on profit, and Investor D gets 7%.
See info below:
Property cost 152351.16
Investor A 55000
Investor B 20000
Investor C 20000
Investor D 15000
Investor E 32351.16
Please advise what you think is the best way to split profit equitable?