I have a good friend who is a very good jack-of-all-trades, when it comes to doing renos. I have little experience in doing renos myself, but am learning fast. My specialty is more in finding good properties that need a little work, usually 2 bdr flats in city hub areas. He is good at doing renos quickly and minimising the expense.
I can see the potential here for a really good property investing relationship. We both have leverage in different areas.
My strategy is “Buy Reno Hold”.
He has only a little equity, where as I am ready to move on another investment.
Any ideas on how to agree on the terms of a partnership that is mutually beneficial. He is a good mate, and I want to work with him on future projects in a way that benifits the both of us long term.
Ideas that I have had include:
1. buying a trail place together = Me 70% Him 30% (remember he has less capital)
2. paying him a percentage of capital gain based on evaluations prior and after reno.I want him to have a vested interest in the success of the properties, not just because I want a good job done, but also because I want him to benefit from our success.
Anyone had experience like this before?
Any suggestions..??Cheers
::apologies that this same message appears in “Need Help”, I posted there by mistake:: [blink]
Food for thought:
On each project you both keep a record of time invested (you in looking for the deal, he in renovating), and allocate a nominal hourly rate. You also record what interest you each would have received on the money provided. You deduct all these costs of your net profit and either split it 50/50 or in relation to the money value (labour and interest) that each of you put into the deal.[biggrin]
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