My brother and I are planning on purchasing a home as an investment. I will provide the down payment for the home ($20-25k). Since there is a disproportionate initial investment, it seems only fair that the profits from that investment be disproportionately divided, as well. Hence, a 50/50 split would be unfair as I would be assuming the entire financial risk.
There are a number of situations for which the profits must be distinctly approportioned following the purchase of the home.
1) Property is rented out to a tennent. In this case, my brother would be managing the property (as I am located in an entirely different location than our purchase location) and ensuring that the property is properly maintained. How should the profits be distributed?
2) Brother lives in property. He pays for the mortgage and associated expenses. His investment in the property increases monthly. How should the profits of the sale of the property be sold in this case?
3) Enhancements are made to the property. My brother either does the work himself or pays for hired help to 'fix up' the home we purchase. This seems to be another expense associated with increasing the value of the investment. Thus, the cost of enhancements is also another form of investment on his behalf.
The most likely scenario consists of a combination of the above 3. Any ideas for how the profits should be split? Should it be proportionally based on the amount of capital provided by each individual? How much should he be payed for finding tennents and maintaining the property?
I know this is very long, but I would appreciate any help.
There are a number of situations for which the profits must be distinctly approportioned following the purchase of the home.
1) Property is rented out to a tennent. In this case, my brother would be managing the property (as I am located in an entirely different location than our purchase location) and ensuring that the property is properly maintained. How should the profits be distributed?
2) Brother lives in property. He pays for the mortgage and associated expenses. His investment in the property increases monthly. How should the profits of the sale of the property be sold in this case?
3) Enhancements are made to the property. My brother either does the work himself or pays for hired help to 'fix up' the home we purchase. This seems to be another expense associated with increasing the value of the investment. Thus, the cost of enhancements is also another form of investment on his behalf.
The most likely scenario consists of a combination of the above 3. Any ideas for how the profits should be split? Should it be proportionally based on the amount of capital provided by each individual? How much should he be payed for finding tennents and maintaining the property?
I know this is very long, but I would appreciate any help.
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