OfflineGood Morning!
We are working with investors on properties we are going to flip. They will be putting up the money and we will be managing the process. Is there a standard % investors typically get for doing this?
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Good Morning!
We are working with investors on properties we are going to flip. They will be putting up the money and we will be managing the process. Is there a standard % investors typically get for doing this?
There really isn't a standard split. It is completely up for negotiation. You can get as creative as you want on these types of deals.
However, the two main ways I have completed this type of arrangement is either a 50/50 split by partnering with them or I will use the money partner as more of a lender. If they are a lender then it will be more of a hard money loan. Hard money is usually pretty expensive as loans go but many times they make a deal possible. The advantage here is that if you are looking at a large amount of profit you are not splitting it with anyone. However, the downside is that it is a loan. Even if the deal ends up losing money you still owe the lender. By partnering, you and the cash partner share in the profit or the loss.
It's always good to have a great money partner in your pocket though. Good luck.
Chris
"Faith is the eternal elixir which gives life, power, and action to the impulse of thought.
"Faith is the starting point of all accumulation of riches!"
- Napoleon Hill, Think and Grow Rich