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I have been approached by my best friend to manage a duplex he wants to buy. He wants me to own a percentage of the home for managing the property. What is a fair percentage.
Starting a Joint Venture
- Thread starter Matt Parlato
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- Aug 30, 2007
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10-15%
using the formula of
50% for money partner
20% for mortgage qualifier
30% for expert
This 30% is split into roughly three tasks
A) find the asset and writing offers
B) organizing the venture from start to finish ( Richard Dolan calls this mastery in his 4 M strategy of money, mortgage, management and mastery )
C) property management
More on this here: http://myreinspace.com/threads/blue...expert-deserves-to-make-some-money-too.29091/
using the formula of
50% for money partner
20% for mortgage qualifier
30% for expert
This 30% is split into roughly three tasks
A) find the asset and writing offers
B) organizing the venture from start to finish ( Richard Dolan calls this mastery in his 4 M strategy of money, mortgage, management and mastery )
C) property management
More on this here: http://myreinspace.com/threads/blue...expert-deserves-to-make-some-money-too.29091/
Last edited:
- Joined
- Dec 14, 2013
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- 980
For PM, I would personally consider 10 - 15% of gross rents paid out in cash to me on a monthly / quarterly basis. For PM, I would not be interested in taking a % of profits, too complicated and not really worth the paperwork for such a small transaction.
At the end of the day you are looking at around ~$2,500 per year in income. Not really worth a complicated JV document. Not enough money on the table to enforce if there ever was a problem. Take cash as a PM fee.
Just my two cents.
At the end of the day you are looking at around ~$2,500 per year in income. Not really worth a complicated JV document. Not enough money on the table to enforce if there ever was a problem. Take cash as a PM fee.
Just my two cents.
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Fair enough. Cash today is better than maybe more cash (or no cash) tomorrow !
Doing a simple math: buy for $300,000 and rent for $1600/month. PM fee of say 10% is $160/month or about $2000 in a year .. times 5 years = $10,000. Give or take.
Asset goes from $300,000 to $340,000 in 5 years, i.e. $40,000 equity plus mortgage goes from $240,000 (assuming 20% down) to $210,000 so another $30,000 equity. $70,000 equity gain. Times 10% = $7,000. Times 15% = $10,500.
Q.E.D.
Doing a simple math: buy for $300,000 and rent for $1600/month. PM fee of say 10% is $160/month or about $2000 in a year .. times 5 years = $10,000. Give or take.
Asset goes from $300,000 to $340,000 in 5 years, i.e. $40,000 equity plus mortgage goes from $240,000 (assuming 20% down) to $210,000 so another $30,000 equity. $70,000 equity gain. Times 10% = $7,000. Times 15% = $10,500.
Q.E.D.
Last edited:
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- Jan 18, 2016
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- 161
Something to consider is where it is located and laws around managing a property you don't have a percentage of ownership in.
I only own in Alberta- so I don't know what the other provinces are like, but if you aren't a professional/certified manager, you need to have an ownership stake to manage the property legally.
I only own in Alberta- so I don't know what the other provinces are like, but if you aren't a professional/certified manager, you need to have an ownership stake to manage the property legally.