Tim wrote:

wrote

John bought income property A in London in 2005
for 100 pounds, it makes 20 pound per year,
Dave bought income property B in Liverpool in
2006 for 60 pounds, it makes 15 pound per year,
Larry bought income property C in Manchester in
2007 for 75 pounds, it makes 17 pound per year.

NOW, the 3 want to become partners where the pie
now is A+B+C and income is 52 pound per year!

How much ownership each gets?
How much income each gets per year?

Is this a Homework question?!

Anyway, obviously John would get about 38% ownership so
that he still gets 20 pounds per year, Dave would get about
29% ownership so that he still gets 15 pounds per year, and
Larry would get about 33% ownership so that he still gets 17
pounds per year. Unless they decided to be unfair, of course...

Doing it differently would not necessarily be unfair, just
fair in a different way.

Although we are told that the total income is unchanged at 52
pounds per year, and we can perhaps assume that this means the
income generated by each property is also unchanged at 20/15/17
pounds per year, we are not told whether and how the properties'
value has changed since they were bought.

One fair way to split ownership is in proportion to the value.
If this has not changed, the split should be 100:60:75, i.e.
John gets about 42%, Dave gets about 26%, and Larry about 32%.
The implication of this, though, would be that John's income
goes up to about 22 pounds per year, Dave's down to about 13
pounds per year, and Larry's goes down slightly but is still
about 17 pounds per year.

More to the point, if the properties are mortgaged, the split
should be on the basis of equity, not value.

One needs to ask why these guys are doing this. Perhaps they
want to hedge against fluctuations in income and in value.
Why else would any of them consider taking a drop in income
or in their equity stake?

It seems to me they need to negotiate a compromise between the
income-fair and equity-fair solutions.