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Author Topic: Splitting a deal with another investor  (Read 1048 times)

Offline deverhart

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Splitting a deal with another investor
« on: October 15, 2007, 09:09:42 pm »
I have an investor friend who rehabs almost all the houses he buys, just like me. Difference between his business and mine is he has a very large amount of capital and credit available so he does more flips than me (about 40/year compared to my 8/year).

His contractor can't keep up and he has offered to do a split with me if I do the work and fund the work, so he can maximize the profit potential on this deal.

He is paying $80k. House was built in '95 and needs only cosmetic repairs which I estimated at $15k. ARV is $194k.

We would split the profit 55% to 45% in HIS favor because he is paying the capital gains tax.

We are debating about who pays the mortgage.

We already agreed we would price the house 10% under comps to get it sold quick so regardless of who pays the mortgage it wouldn't be for long hopefully. I have used this strategy for the last year and my average time on market is 32 days.

I've never done a split before so I'm looking for some suggestions on who should pay what etc.. It is all still negotiable, even the repair costs.

He did find the deal and fund the purchase. There is enough meat on this to do a split, so I am open to it because I am between projects right now.
« Last Edit: October 15, 2007, 09:11:29 pm by deverhart »

 




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