Hi BP,
Before I ask, I'm sure this question already exists but all I found were generalizations when I searched.. maybe I need to learn to search better! If you found something please let me know the terms you used.
OK here's the ask. Two partners plan to go in for a 300k fix-and-flip, 250k principle, 50k quoted by contractor, 12 month payments. One partner puts in 50% of the downpayment (let's call it 30k) and is 100% responsible for the deal, contractor etc.
Second partner puts in 50% of downpayment, another 30k, and is 100% silent / no responsibility.
Each partner pays 1/2 the mortgage every month and 1/2 whatever additional costs.
Scenario 1: Property sells for 400k without complications. Profit is 100k - funding cost (call it 20k) or 80k. What's a reasonable / ideal split?
Scenario 2: We decide a refi + rent is the best option. Rent is 5,000/mo, mortgage and expesnes are 2,500/mo, so net income after taxes is 2,500/mo total. Working partner would manage the rental. What's a reasonable / ideal split?
Scenario 3: Something I didn't think of?
Additional Q:
1. What google search terms should I use to pull up boilerplate paperwork for such a contract?
2. Should we get a lawyer involved?
Thanks in advance!
Charlie (Sacramento)
