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View Poll Results: Two partners are buying a property to rehab and sell after living in it for a year. The profit will
80/20 person A/person b 7 63.64%
70/30 person a/person b 2 18.18%
60/40 A/B 0 0%
50/50 1 9.09%
40/60 A/B 0 0%
30/70 A/B 0 0%
Other (please explain in post) 1 9.09%
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What's a fair split for partners in a real estate investment?
Old 04-12-2006, 10:26 PM   #1
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What's a fair split for partners in a real estate investment?

Just curious what YOU would come up with. I'm in this situationa nd would like to compare my results vs popular opinion.

The POLL cut off my explanation.. Person A also provides 70% of the workmanship (knowledge base). Person B provides 1/2 labor, and will reside in the home paying the mort/PITI for 12 months (just enough to break even) He will be saving 200/month vs his old apartment.

FYI, the home should yield between a 15 and 25k profit. It is expected that each person will put 250 hours into the home.
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Re: What's a fair split for partners in a real estate investment?
Old 04-12-2006, 11:11 PM   #2
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Re: What's a fair split for partners in a real estate investment?

All the profit will go to the lawyers. This will never work. Doctors and hospitals might wind up with a share too.
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Re: What's a fair split for partners in a real estate investment?
Old 04-13-2006, 10:41 AM   #3
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Re: What's a fair split for partners in a real estate investment?

Person A gets their investment back + max(T-bill/S&P/RUT return) for the period. Or maybe take an average of those indices.

Person A gets all depreciation for the tools.

I'm unclear about what the "70% of the workmans" means. Is that workman's comp insurance?

Then split remaining profit by work done. If both partners work 50%, split the rest in half.
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Re: What's a fair split for partners in a real estate investment?
Old 04-13-2006, 04:36 PM   #4
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Re: What's a fair split for partners in a real estate investment?

From the way you make it sound (although a bit confusing) Person A will provide 100% of the capital and do half the repairs. Person B will do the other half of repairs and live there. I wouldn't even offer to split the profits. He isn't doing anything other than half the labor. Figure what it would cost you to hire a contractor and base his compensation off of that. You Person A is taking on a significant risk in investment over Person B who can just walk away if it doesn't work.
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Re: What's a fair split for partners in a real estate investment?
Old 04-14-2006, 07:04 PM   #5
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Re: What's a fair split for partners in a real estate investment?

No idea, but I can guarantee you that both A and B will feel they got the raw end of the deal.
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Re: What's a fair split for partners in a real estate investment?
Old 04-14-2006, 07:07 PM   #6
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Re: What's a fair split for partners in a real estate investment?

yeah, why not just hire a contactor and rent it out for a year? a situation like this one is begging for trouble.
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