Hello,
I am new to this so please help.
I have an investor who is going to pay for anywhere between 50%-100% of the project (flipping a house). When speaking to other people in my area who flip with investors they suggest two things-
1- Investor pays all costs and splits profit 50/50
2- Investor only pays a percentage of total cost including renovations and see a flat rate return on their money once sold (10-20%)
My question is what do you think works best? The way I see it since I will be the one running the project they are certainly entitled to some of the profit but since I am guaranteeing them a return on their investment and also running the project I should see the lion's share since they do not have to do anything (other than write a check)
Do you suggest a flat rate of return on their money (10%) as well as a profit share based upon how much of a percentage they put into the project? I will be contributing $$ as well but they will be the main source.
Thanks!
