Partnership breakdown. I pay for property he pays for rehab.

[Nicholas Lohr]

Question about how best to structure this deal. Im buying a buy and hold strategy duplex for 200k using 30% down of my money on a loan in my name. I have a partner who's willing to put up the 25k in cash that it needs in work. He is simply putting in the money and Im literally doing everything else. Curious if anyone has any thoughts on how to best structure the deal? A split equaling the money we both put up doesn't seem fair because I did and am going to be doing everything else.

[Joe Gigliello]

I agree with Matt that you should try to negotiate a fixed cost/return (say 6% to 10% per annum) for the $25k (treat it as if it was a loan) because you are coming up with the $60k down payment plus closing costs, your partner is only putting up the $25k to rehab, and you are doing the work.  I assume you will also be managing the rental, paying bills, handling leasing, making the loan payments, etc.

A typical partnership structure I've seen is when one partner puts up all the money and the other partner does all the work, they split profits equally.  However, you would need something way more favorable since you are also putting up most of the money and are taking the risk with the loan since it's in your name.

Best of luck!