In rehabing, how would you decide how much each partner gets after the property is sold. For example, if one person most of the money in, but the other person does most of the work? How does this work?
Thanks
I don’t know how much, but I can’t be more clear: GET IT IN WRITING AHEAD OF TIME, before you buy or even look at buying your first house with a partner.
You can borrow hard money at up to 15% for a deal.
Partners that put up the money cost 50%.
Why???
Only partner up with someone that complements your weaknesses or does things you are not able to do, or adds value in a way that cannot be added if he/she is not there.
Be careful who you partner with. Don’t partner up with anybody just because the two of you feel like it.
I’ve been the cash investor on similar type partnerships. I usually expect to make at least 20% ROI on my cash in. The work is quoted by at least 3 contractors and the lowest bid is the minimum that the partner doing the work should be able to make on the deal. If he/she does all the work, they make that right off the top. If they can do it for less, then they can keep the profit after paying me my 20%.
The rehab work is taken off the top of the profit, so I don’t have to pay CG taxes on that. My partner earns it as income, which is then his/her problem to shelter on their side.