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Updated about 9 years ago,
Compensation for Acquisitions
I have a question about something that I'm trying to decide on, and I can't seem to find previously posted on any forums. I have a couple of people that I've sort of brought on my team to help me out with finding and negotiating properties to buy or wholesale. Without going into too much detail, they are each helping me out on specific niches or strategies that they are particularly suited for. Both guys are valuable individuals who I will want to keep close to me for a long time I believe. Neither are employees, they will essentially be acting as contractors for me. When we successfully turn a deal into a profit in which one or the other specifically helped me with, I want to make sure I take care of them well enough to keep them interested in growing with me as my business grows.
My questions is... how are you compensating people who help you out in this way?
I know that every situation is going to be unique depending on the needs, relationship, business structure, and other things, but I'd be very interested in hearing some examples of how people handle this or what they think this service is worth. As of now, I'm thinking of a percentage of total profit at the end of whatever it is I do with it (flip or wholesale). So far, they've been along for the ride based on trust that I will make it fair when it happens, and I haven't put any numbers out there, but they are comfortable with taking a percentage of the profit at the end. I just don't want to go too far down the road before we have an understanding on this and risk a sour situation due to mutual mystification.
Thanks in advance for the help!