Standard JV Equity Splits
While negotiable, a common Joint Venture structure involves the money-partner providing 100% of the funding in exchange for 50% of the profits.
A Joint Venture (JV) is a partnership between two or more parties to undertake a specific property project. The most common pairing is a 'Time and Experience' partner (who finds the deal and manages the build) pairing with a 'Money' partner (who provides the capital).
While every JV is subject to negotiation, the industry standard benchmark is a 50/50 profit split. The money partner receives a 50% equity stake in the profits in exchange for putting up 100% of the required capital. Their initial capital is paid back first upon sale or refinance, and the remaining net profit is split down the middle.
Debt vs. Equity
Alternatively, some money partners prefer to act as private lenders rather than equity partners, providing funds at a fixed interest rate (e.g., 8-10% per annum) secured by a legal charge, leaving the developer to keep 100% of the remaining profit.