All Forum Posts by: Kristin Drumheller

We have a four doors currently and two of our friends that are out of state want to partner on our next Airbnb. They would strictly be providing funds. We would do the remainder of the work to find, purchase, and manage the property. What is a fair way to split the deal so everyone is well taken care of? Should everyone bring 33.3% to closing, split equity equally, we charge a management fee (20% seems average), and split profits equally?

Thanks for any insight!

@Ryan Moyer thanks for the input everyone! Honestly I didn’t even think of it as not being favorable for him so appreciate the feedback. I was more so thinking the difference in down payment was just my contribution of finding the deal and handling acquisition. I’ve been listening to a lot of the BP podcasts and it seemed like they really cautioned that too many

people don’t value their time enough for the acquisition and place more value on the person who just brings money so I was trying to make sure it was fair.

Thanks again for the feedback!

I have a good friend looking to invest some capital in real estate. We currently have a couple units in different asset classes that are doing well so he’s looking to get involved.

We are bringing the deal and handling management and looking for a fair way split DP and profits from a STR here locally. I have seen other similar posts that recommend they bring the entirety of the down payment and the profits are split 50/50 from there.

My original thought is 60/40 split on down payment (him bringing the majority), 50/50 ownership, we take a 20% management fee, and all other profits are split 50/50. Does this seem reasonable?

Thank you for responding @Jack V. Ospina!

Update: After speaking with our realtor we have decided not to pursue that property. The numbers wouldn't work and seemed too risky for us to not get some title work done.

Thanks for responding everyone!

Update: After speaking with our realtor we have decided not to pursue that property. The numbers wouldn't work and seemed too risky for us to not get some title work done.

Starting to research some of this now too, @John Fedro I'd like to pick your brain!

@Chase Sexton what did you end up doing?

I found a property on CL for $119,900 that is being used as an Airbnb. I ran some numbers and found that around $90,000 would be our sweet spot. I got in touch with the owner and on the phone he explained that they would be willing to do a discounted rate but we needed to know that there were title issues to be aware of. This is the first investment property I’ve ever made an offer on and really did it for the heck of it to just start making steps and I’m already feeling WAY in over my head. He explained that they bought the house from the government after the former owners passed away and the house was not left to anyone. (I might not have that exactly right but that was the general gist). He said if we wanted to buy the house with a mortgage we would have to do a quiet title to get title insurance for the bank. If that we’re the case they would not be willing to do the discounted price of $90k but if we did a cash offer then they would be ok with that.

I’m not sure how common situations like this are but it seems like if a long lost cousin shows up this could be a big issue. It could also be a great deal with a very minor fix down the road. Help!

This is literally the first property I ever emailed on and made a low offer because why not right? Brandon has been in my ear and I decided to just do it even though we have very little figured out.

I found a property on CL for $119,900 that is being used as an Airbnb. I ran some numbers and found that around $90,000 would be our sweet spot. I got in touch with the owner and on the phone he explained that they would be willing to do a discounted rate but we needed to know that there were title issues to be aware of. This being my first time ever really getting involved in real estate I’m already feeling in over my head. He explained that they bought the house from the government after the former owners passed away and the house was not left to anyone. He said if we wanted to buy the house with a mortgage we would have to do a quiet title to get title insurance for the bank. If that we’re the case they would not be willing to do the discounted price of $90k but if we did a cash offer then they would be ok with that.

I’m not sure how common situations like this are but it seems to me like it could end up poorly if a long lost cousin shows up. It could also be a great deal with an easy solution down the road. Help!

Apart from whether or not our local market is “good”, since any market can be good for real estate, would you recommend starting locally to be closer to the action or out of state to keep emotion out of it?

Thanks @Irina Belkofer. I just wasn't sure. The only LOC we've had was to open our office and for that particular bank we had to give reasons why we needed that money so it always pertained to the business the LOC was intended for. I wasn't sure if a LOC could be used as a loan to another business since its not related. Thanks for the insight, hope that makes sense!