Background: My partner and I created an LLC exclusively for the purchase of a multi-family property in KY. We both put in equal amounts of personal cash into the LLC's bank account to cover purchase costs and rehab of the upper two units.
Current situation: The upper two units have been up and running for five months. All rent goes into our LLC bank account and all expenses come out of the same account. The bank LLC account is very small after the rehab and left untouched otherwise. The bottom floor is a 2500 sqft wide open area that a nonprofit used to rent back in the day. The nonprofit is no longer interested in renting the space. My partner would like to build out the bottom two units to make the property a 4-family. I agree. The only challenge is that my partner wants me to front the 35k-50k in construction costs and in exchange my partner will manage the work, find contractors, negotiate prices, and keep the project going smoothly.
My partner said that I can get my money back when the property is refinanced. I'm just not sure that I feel comfortable fronting that much money when my partner doesn't have somewhat equal skin (money) in the game. I suggested that we find a project manager and then both step back and contribute equally.
What are some splits and arrangements that you all have done? What are your thoughts on one funding partner, one contracting partner, and equal profit splits?
