Posted by Mr. Ed (ATL) on April 17, 2000 at 22:33:13:
The “conventional” way an arrangement like this works is that your partner puts up the money, and you do all the legwork, and any profits made are split 50/50. However, I like the response posted above mine much better; you’re allowed far more control, and probably more profit for yourself, as well.
Ed
Got a rich partner, how do I split profit? - Posted by Steve GA
Posted by Steve GA on April 16, 2000 at 21:45:57:
Hi gang, I purposely made myself known to a wealthy real estate (commercial properties)investor, and he seems to have fallen in love with my creative thinking. (For the record, I just started and only own one income property. No big ego here.) This man wants desperatetly to partner with me, but insists that I come up with the terms. He sounds like a typical horse trader. I need to be careful to not offer too much, but I need this mans money. If I find the deals, what is a good split of profits? Any ballpark ideas? This partner will fund anything I want to do, so what is a fair split?
Any contract “wording” I need to watch out for? I may be overcautious, but I feel that I should equally benefit and not make him richer. However, I want to show appreciation to him as well. Help if you can…
Thanx to all in this group who are so generous with knowledge…
Re: Got a rich partner, how do I split profit? - Posted by Bud Branstetter
Posted by Bud Branstetter on April 17, 2000 at 10:07:21:
Hard money lenders will charge you 12 to 15% plus some number of points. If you want to GIVE him more than usurious I would suggest a participatory loan.
Re: Got a rich partner, how do I split profit? - Posted by tim
Posted by tim on April 16, 2000 at 23:40:35:
What did you say to this investor to get him to trust and believe in you? And how did you find and approach him?
Thanks
tim
Re: Got a rich partner, how do I split profit? - Posted by Justin-IL
Posted by Justin-IL on April 16, 2000 at 22:55:53:
This is what I would do:
Rather than partner with him on deals and split the profits, maybe you can use his cash for deals and guarantee him a rate of return. Have him be your hard money lender. Offer him anywhere from 12-18% on his money, secured by a mortgage at a low LTV.
This way, you have total control of the deals you do, and can keep all of the profits. He’ll be earning a decent return on his money with little to no risk. Maybe after you do a few deals with him, he’ll see that the system is working well, and you can arrange a line of credit with him. Wouldn’t that be sweet? 
Hope this helps…
Justin