Hands on partner compensation
- Thread starter gardner
- Start date
- Joined
- Aug 22, 2007
- Messages
- 2,005
There is one way which makes the transaction very cut & dry and fair for all because you both, in essence, own this business and therefore want to ensure the `business` is getting the best deal for its dollar.
a. They can qoute the "JV" (you and them) how much it will cost to do the work and that becomes part of their financial contribution (as if it was a cash infusion) that is returned to them upon the ultimate sale of the proeprty (or re-finance). key is to determine whether the quote is accurate, and you do that by getting other quotes as comparison.
b. If it is cheaper for others to do it, then it makes sense from a business perspective to choose the other contractor (or have the partner adjust theirs accordingly).
Trust that gives you perspective on the situation. Remove the `personalities` from the equation, do what`s best for the business (JV).
a. They can qoute the "JV" (you and them) how much it will cost to do the work and that becomes part of their financial contribution (as if it was a cash infusion) that is returned to them upon the ultimate sale of the proeprty (or re-finance). key is to determine whether the quote is accurate, and you do that by getting other quotes as comparison.
b. If it is cheaper for others to do it, then it makes sense from a business perspective to choose the other contractor (or have the partner adjust theirs accordingly).
Trust that gives you perspective on the situation. Remove the `personalities` from the equation, do what`s best for the business (JV).
- Joined
- Aug 30, 2007
- Messages
- 13,879
QUOTE (gardner @ Sep 7 2008, 10:49 PM) Does anyone have any Idea on how to compensate a 50/50 partner who is doing all the renovations. I was thinking of him drawing an hourly wage from the positive cash flow. Any thoughts?
Many thanks in advance,
Grant
whatever you can agree on !
It maybe:
a) free
b) $12/h
c) 10% of subcontracted 3rd parties
d) 1% of each $20,000 spent in add`l profit %
e) X % of cash flow but 0% of equity
f) free rent
g) a trip to Hawaii
It depends what you do "for free" .. I assume you are the money partner .. does your money earn interest ? Maybe not .. then he should work for free .. maybe 12%/year .. then he should get X $s/h !!
Agree on it up front .. what ever is win/win in both of your eyes ! That is the beauty (or the beast) in JVs !! Many options .. many areas for disagreement ..
Many thanks in advance,
Grant
whatever you can agree on !
It maybe:
a) free
b) $12/h
c) 10% of subcontracted 3rd parties
d) 1% of each $20,000 spent in add`l profit %
e) X % of cash flow but 0% of equity
f) free rent
g) a trip to Hawaii
It depends what you do "for free" .. I assume you are the money partner .. does your money earn interest ? Maybe not .. then he should work for free .. maybe 12%/year .. then he should get X $s/h !!
Agree on it up front .. what ever is win/win in both of your eyes ! That is the beauty (or the beast) in JVs !! Many options .. many areas for disagreement ..