All Forum Posts by: Don Winkler

Hi Ben,

It sounds like your Dad will be investing most of the money so your investment is what we generally refer to as "sweat equity"

Partners have two types of accounts - a capital account and a profit & loss (P&L) account 

In a family setting, you and your Dad could both be 50/50 partners subject to some economic carve outs

For example, your Dad can receive a preferred return (say 6%) with your return kicking in after that

Example: assume your Dad invests $50,000 and the cash flow for the year is $6,000 - the cash flow is  credited equally to both of you since you met the preferred return target of 6% for your Dad

If the cash flow was $5,000, then $3,000 is credited to your Dad and only $2,000 is credited to you since the preferred return comes first

You will probably set this up as an LLC so no one has personal liability

If your Dad will agree you can be the managing member so that you can make all or most of the decisions

Sorry for the long reply but there are a lot of ways to cut up the pie in a partnership