Wisdom on Partnership Structure

[Andrew Hejtmanek]

Good Morning BP!

I'm an investor in Oklahoma.  Over the past 7 years, a buddy and I have partnered 50/50 on a few flips and currently have 1 long-term rental.  We would have more, but I went through a divorce and that really slowed us down.  Now we are looking to ramp back up.

This time, it looks like its going to be a little different.  I have the capacity to bring cash to enable acquisition.  He has some, but its definitely a bit more limited but he is the rehab manager and he is excellent at managing the day-to-day.  

We were contemplating setting up a new LLC with different ownership %'s where he would see cash flow as he operates the properties (similar to a property management firm), but might only own 10% (or something similar). He would benefit from monthly cash flow whereas I'm more interested in the long-term benefits (appreciation, debt paydown and yes, cash flow).

Does anyone have any suggestions on structure/terms that you may have seen in the past that would be beneficial to us both?

[Drew Sygit]

Get an attorney to draw this up!

Think of every possible outcome and have it covered, including death or incapacitation of one of you.