I hear people talking about 70/30 (70% the investor) partnership. Can someone share more detail? Is investor investing the down payment for park, or investing the whole purchase price? Is it 70% of net profit, until investor get money back? Does investor get anything when park is sold?
The 70/30 split is common but it is always negotiable.
Typically, there are two partners:
GP/Promoter (you). LP/Capital Partner (accredited investors “rich folks”).
LP gets a “preferred return” on equity, say 8%.
After pref is paid, GP gets 30% (LP 70%) of cash flow from operations. Often, but not always, the GP/LP split is the same in the event of refinance, sale, etc.
The equity is paid back to LP before the split (otherwise GP is essentially taking 30% of GP’s capital/basis and not just 30% of the upside).