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Joint venture equity split in SPV (Math versus effort)

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Zozooo
Zozooo
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Hello,

I would appreciate if someone assist with the below calculations on a joint venture equity split:
Total purchase price: 500K.
Total expected GDV is 1.65M
Development cost is 400K (bridge loan at 10%).

Property developer and manager is putting 80K of equity
Family and friends putting 37K of equity
Investor 1 (myself) putting 125K of equity
258K of a bridge loan to complete.
Assume no fees, tax, etc for simplicity.

Property developer and manager is doing all the work from start to finish.

What is the most common way of splitting the shares in the SPV for this property development joint venture?
What is a possible fair profit distribution after sale? What is the possible fair annual net income distribution?

Thank you in advance,

01/10/2019 00:41

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