You might suggest that once they get their money back, you split the first $100k (or whatever number makes sense in your deal) 25/75 where you get 25%, then anything over $100k, you split 50/50.  

Does it actually make sense to be building in your market right now, or are you just doing it because you're ready and want to do it? 

If so, it would make sense to figure that out first before deciding on a specific area.

However, exploring out of state markets could offer stronger cash flow upfront, so it’s worth evaluating both paths.A piece of advice would be to focus on building your core 4  team: agent, lender, contractor, and property manager.

It's a pretty good deal and definitely made sense for us.

@Tove Fox - Residential Real Estate InvestingPros:Lower Entry Costs: Easier to get started with less capital required.High Demand: People always need homes, making demand relatively stable.Easier Financing: Mortgages are generally easier to secure with favorable terms.Simplicity: Easier to understand and manage, especially for beginners.Flexibility: You can use it as a personal residence or rent it out.Cons:Tenant Turnover: More frequent turnover leads to vacancy and more management.Lower Cash Flow: Income potential can be modest compared to commercial properties.Emotional Buyers: Residential prices can be influenced by emotions, leading to price volatility.Maintenance Burden: Landlords often deal with repairs and maintenance, which can be time-consuming.Commercial Real Estate InvestingPros:Higher Income Potential: Stronger cash flow and higher returns are common.Long-Term Leases: Tenants often sign longer leases (3-10 years), reducing vacancy risk.Professional Tenants: Business tenants tend to take better care of the property.Valuation Based on Income: Prices are based on the income the property generates, not market emotions.Shared Costs: Tenants often cover property expenses like taxes, insurance, and maintenance (via triple-net leases).Cons:High Entry Costs: Requires more capital or partnerships to get started.Complex Management: More expertise is needed; you may need a professional property manager.Economic Sensitivity: Commercial properties are more sensitive to economic conditions.Challenging Financing: Securing financing can be harder, with stricter terms and higher interest rates.Zoning and Legalities: More complex regulations compared to residential properties.Key Differences:Risk: Residential tends to be lower risk, while commercial offers higher rewards but with greater risk.Management: Residential is easier for DIY investors, while commercial properties usually require a team.Scalability: Commercial properties are easier to scale, offering more potential for significant cash flow increases.

That makes perfect sense for you.

I won’t be responding to this non-sense anymore. 

Frankly, it’s absurd.But don’t just rely on common sense.

Having a group of friends living in an apartment complex creates a sense of community and reduces turnover.