My advice for investors that are just beginning in real estate, partner with other investors! I have often referred to as real estate investing as being a team sport.  The reality is you can find multiple moving parts in any real estate deal, so in a lot of cases different investors will solve diverse challenges of a particular deal differently. When this happens (in my humble opinion) its best to work together and split profits. Real Estate Investing For Beginners Point 1: 50% of something is far better than 100% of nothing.  The hang up is that most investors are not taught to work together.  For example: one new investor that recently talked with me told me that he had a couple of good buyer leads from his REI Matcher website that had matched up with some houses on the site, but he didn’t know what to do with them (He must have skipped that module in my course hopefully he’ll read Real Estate Investing For Beginners).

OK, so If two investors collectively have a buyer and seller for a residence, it is up to the investors to choose how you can put the deal together and divide the proceeds.

Here are some common ways to structure it:

1) For a deal that will produce ongoing income, you might form a limited partnership for the deal. As an example, the partnership could produce an LLC that buys the property sub-to and sells it on a wrap. The investor-partners of the LLC would then divide the proceeds as they see fit. The division could be 50-50, or some other type of split.

2) In some cases, like in Mortgage Assignment deals, the investor is not buying the property at all. They’re merely assigning their contract to an end buyer for an assignment fee. These transactions produce a one-time fee at closing which can be split in some way between the investors.

 

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In these transactions, if the end buyer is someone that has been identified by another investor, again, you’ve a couple of possibilities:

• Form a partnership to do the deal
• If the other investor is really a Realtor, you can compensate them with a commission
• If the other investor isn’t a Realtor, but inside the organization of advertising for possible buyers for your property, you may well have the ability to pay a marketing fee to that investor in exchange for their lead(s).

Real Estate Investing For Beginners Poing 2: as an investor you are doing a wonderful service by helping the seller out of the home and supplying housing for a new buyer, plus it pays pretty well too!