Partnership / JV Calculator
Structure your deal · Split equity and profits · Analyze returns per partner
Capital Contributions
Down payment + closing + rehab
Full property purchase price
Profit Split & Income
Partner B gets 50%
After all expenses except debt service
Expected property value growth
This looks like a sweat equity deal
The profit split (50/50) differs significantly from the capital split (70/30). This is common when one partner contributes money and the other contributes labor, expertise, or management.
Management Responsibilities
Comparable to professional PM fee (8-10%)
Paid to Partner A before profit split, compensating for the labor of managing the property.
Partnership Structures
50/50 Equal Partnership
Both partners contribute equal capital and split profits equally. Simple and fair when both partners bring similar value (capital + effort). Works best for partners with similar financial resources and involvement levels.
Money Partner / Sweat Equity Partner
One partner provides most or all capital; the other provides labor, expertise, or deal sourcing. Common structure: 70/30 capital split, 50/50 profit split. The sweat equity partner earns their additional share through finding deals, managing rehab, and/or managing the property.
Preferred Return Structure
The capital partner receives a “preferred return” (typically 6–10% annually on invested capital) before any profit is split. After the preferred return is paid, remaining profits are split according to an agreed ratio (often 50/50 or 60/40 favoring the operating partner). This structure protects the capital partner's downside while incentivizing the operating partner to maximize returns.
Critical Legal Considerations
- Always use a written operating agreement drafted by a real estate attorney
- Form an LLC to hold the property — do not hold real estate in a personal partnership
- Define exit triggers: what happens if one partner wants to sell and the other does not?
- Include buyout provisions: right of first refusal, fair market value appraisal process
- Define capital call procedures: what happens if the property needs additional capital?
- Address death and disability: what happens to a partner's share if they die or become incapacitated?
Partnership Analysis
Ownership vs. Profit Split
Annual Cash Flow
Partner A
$6,000
8.6% CoC
Partner B
$6,000
20.0% CoC
Exit Analysis (5-Year Hold)
Total Return (Cash Flow + Appreciation)
Partner A Total
$53,891
77.0% total (15.4%/yr)
Partner B Total
$53,891
179.6% total (35.9%/yr)
Break-Even (Cash Flow Only)
Partner A invests $70,000 (70.0% of capital) and receives 50% of profits ($6,000/yr). The split differs from the capital ratio, suggesting sweat equity or management compensation is factored in.
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