BP members. Hope all is well
I run a few STR properties and performing great for all properties. Generating 20% return on cash on cash because I manage myself remotely.
so other friends, potential investors want to invest with me. So I proposed them the followings
20/80 capital contributions and
split equally on cash flow
In the event of sale/ cashout re-fi, distribute 20/80 first until initial contribution is met, then splits equally for the remaining gain.
I think this is fair for all as I provide sweat equity and others put capital
Now They come back to me and they want to do the work and everyone contribute equally and split equally.
some said.” I do interior design, I can setup property”
Some said, “I can do book keeping etc”
But I know they are very busy business person not available for responding for text often.
Their other concern is that this partnership is 4 people partners: two active and two passive, and they dont believe that it is not fair to the other active manager receiving 50% of sweat equity just because he is the one gathering this group, and not knowing ins and outs of STR operations
My response to that is that I will list of all the tasks from acquisition to closing to property setup/ software/ guest communication/ marketing/ revenue analysis.
then lets see who can do what in order to compensate them fairly.
Do you have any suggestions? They can be investors but friendship is important to me too.
thanks for reading all!
