Arrangement With Financial Partner
I have someone who is interested in joining my company as a financial partner. They have $50K available for investment and I will mainly be focusing on rehabbing and flipping sfh. What kind of compensation arrangement is typical for the financier in these situations? Just a ROI or profit sharing?
I am also concerned that once I walk my partner through all the steps and he gets a feel for the game, he might be tempted to just cut me out altogether and leave me without a funding source. I trust this person greatly but the love of money is the root of all evil and I just want to consider all scenarios.
In light of this I am thinking of executing an agreement wherein we split all profits 60 (me) /40 (him) for a three-year term at which time we can reassess our situations and renegotiate if necessary. This distribution would allow me to amass my own investment capital by the end of the term in case he is feeling the itch to go it alone.
Any thoughts or input is much appreciated.
How did this turn out?
luxury mortgage used to write HELOCs titled in trusts and LLCs.