Suggestions setting up real estate business with family investor

[Yutaka M.]

Can anyone give me information on structuring my business? Details below:

• Interested in buy and hold, HML, JV of SFR and MFR
• Family investor is passive and only interested in ROE to supplement retirement income
• I will be doing the leg work of reviewing deals, negotiating and buying at first. The goal is to get the system set up, so I will be overseeing the machine run smoothly
• I have a full time non real estate job, but it is autonomous and am flexible with my time and location. I enjoy my job but would consider transitioning full time into RE
• Investment properties will be near the investor (Fresno) but 4 hrs. away from where I live.
• I am new to RE and just got my CA BRE license (It may not have been necessary in my case, but it was a great way to learn about RE and network with others)
• I'm in the process of setting up the team and am talking to accountants and lawyers that have worked with RE investors.
• Next step is getting to know more investors and realtors (BP and local REIA groups have been great)

First of all, a lot of people will say don't get into business with family, but this has been discussed for a while and we are prepared. I think an LLC may be good. Set up properly this should avoid the gift tax penalty. My question is how does the investor get paid (dividends?) and how will I be compensated for my part (salary?) of any profits?

Amongst the great BP members I've followed, I am reaching out to @Franklin Romine @Elizabeth Colegrove @Mike McKinzie @Michael Zuber @Jeff S. because their situation may be related to mine. Of course anyone else that may have any ideas please chime in. All suggestions will be for informational purposes and not taken as legal advice. Thank you in advance for your guidance.