I have an opportunity to JV with 3 other investors and I want to know how best to spread the risk and reward, fairly, while securing everyone’s stake by the real estate.We’re looking at a potential deal that looks like this:ARV: $400k-$425kMOA: $165k RB: $160kTarget net profit: $75kConstruction time: 6 monthsInvestor #1 has the acquisition funds.Investor #2 has the repair funds.Investor #3 is the General Contractor.Investor #4 (me) is the Project Manager & Listing Agent.If the GC and I waive our fees in exchange for an equal percentage of the net profit will that be fair?

Why is it that we say rents received from the property equals only 2% of the purchase price instead of multiplying the number of units in the property by the amount of average rents to determine the approximate amount of rents that will be received?

We got an FHA loan on it and since my wife is a realtor, we got 3% right back, so we put very minimal down.  3 of the 4 rents equal PITI so we'll live there for a year then move out.  

With margins tightening like that, thorough analysis of any prospective “deal” has become a lot more crucial than it seemed to be when the 1% rule still held in Stockton.

As I continue to learn more and more I agree that networking is extremely important and crucial in building a great team! 

It's best to have set rental criteria for your applicants and apply this criteria equally to all applicants. 

I get that a 4 plex that each have 1 bedroom would equal 4 units.

I realize having all this info is crucial in order for due diligence on the property. 

It seems like you were suggesting to take the extra money I have left over that was set aside for the mortgage, and do something with it to at least earn a return equal to my mortgage rate (4.375%)?

At Spartan, we charge a flat property management fee equal to 9% of the annual rental income (lower than many leading TK companies), as well as a leasing fee equal to one month of rent for each new tenant.