Hi BP Community,
I am in the process of breaking ground on 4-5 projects of NEW Construction and had a few questions for the community. I think its best to provide this by way of example:
1. The total project appraised value is $1,400,000.00
2. The total cost of the project with the land is $1,100,000 without any developer fees
Land is $330,000
Cost to Build is $770,000.00
3. The equity required at closing is $100,000
4. I can put up the equity myself but I friend of mine has been on my case to get involved in a project so I want to propose something that is fair for both sides
5. My proposal or concept is to:
A- Have my investor put up all of the capital for a 50% share in the project- he will get all his capital back after refinance
B- Charge some form of fee- the bottom line is I got this property at a good deal and do not just want to "give" away from the value. I do see value in someone putting up the cash but I also think some form of fee would be reasonable for the work and effort I will put forth to bring this project to fruition- he will be 100% passive
I would love any feedback or ideas from the BP community on a structure like this!
Thanks and chat soon!
