How to structure partnership in rental properties
I'd like some advice on how to structure a partnership between 2 individuals with the following skill sets, for the following goal.
Goal: To acquire rental properties
Skill sets:
Person 1: Real estate knowledge, license, find/vet deals, handle negotiations, legal, tax, bank account, collecting rents, finding tenants. (day to day operations)
Person 2: Master contractor, well versed in every aspect of residential maintenance/remodeling, more flexible schedule to be able to visit properties and make repairs/upkeep.
Both partners have enough cash to bring to the table for 50/50 equity as far as acquiring first 2 properties. However, Person 2 has bad/no credit, and Person 1 and his wife have excellent credit and bank financing will be obtained solely based on Person 1 and wife's credit.
Given the situation, does it make sense for a straight up 50/50 equity and profit splitting? Should Person 1 be compensated extra for the additional risk of taking on debt? Should Person 2 be compensated extra because of possibly more time/energy spent making repairs?
Would it depend on the property? How about if a property requires a lot of repairs up front to be rent-able, but another property requires almost no repairs or maintenance for a year or 2. Should these situations be treated differently? Or would it be more fair to just say 50/50 no matter what and it should even out over time?
Thanks for the help BP