We typically assign small ownership percentages to family members in different amounts and for different people for each companies.

We don't allocate a specific percentage to repairs and CAPEX - just make sure that we have an adequate amount of liquidity at all times.In the future, when there are more properties, we will break things out more, but at this stage of the game (2 properties, 3 units total) it seems like overkill.

However, it is possible to have a rent for the master lease based of a percentage of what you actually collect.

The ARV of the property was $539,000 and the real rehab costs were $40,000 placing my buyer at an all-in percentage of 74%, which in CA is very good.

I allow for a percentage of error on every deal.

In my area (Las Vegas), his system of percentage discounts does not work unless the property is a condo that hasn't sold for many months or a property so far out of town that no one wants.

So high returns (percentage wise) on little money invested, but with lots of risk - legally.

Do I need a contract or need to negotiate a certain percentage or what?

First, have a very detailed business plan that includes business structure and the percentage you are willing to share with the investor.Have you ever watched the TV show "Shark Tank"?

They don't qualify this with the number of people in the household.Personally, I generally use the rule of thumb of 25 percent of gross income.While it has been a practice for years by many to use 30-35 percent, I prefer the lower percentage simply because it does not stretch the budget as much.