Posted by Anthony on August 05, 2003 at 13:00:35:
Hi Wayne, if your ‘Angel’ is putting up the money and you are only supplying labor, I would suggest you split the profit 50/50. Let’s say you use $50k of your friends money to buy and fix up a property, then sell it for $70k more than you paid for it. I would immediately pay him back his $50k + $10k (1/2 of the remaining profit $20k) when the property sells. He is not giving you a loan, this is a business and the rate of return should be appropriate. You might not make anything on a particular property, but he is the only one who could potentially lose big. Hope that helps.