Hi all, I've been doing a couple BRRRs this year but I ran out of capital so started reaching out to friends.  I have a friend who wants to join my current deal and will be contributing about 50% of the capital for the purchase and rehab portion of the deal.

So I'll be providing:

Half the capital, finding the deal, taking title, managing the rehab, getting it rented, managing the PM, eventually carrying the mortgage note, and handling the long-term management/distribution of funds.

My friend is basically a passive investor and this will be his first out of state deal.  For anyone wondering he is 100% trustworthy.  We are lifelong friends.

I understand most people would recommend just paying him a % on his money and then him getting out of the deal once we refinance, but I want to give him equity in the property as well.  I also want to treat myself fairly since I'm doing the majority of the work.

After the refinance I was thinking of returning his capital and giving him an ownership position proportionate to the dollar amount he initially gave me. So if we both put in $50k for purchase and rehab, and the house is worth $150k after, he retains a $50k ownership position while getting back all of his capital, and I get a $100k ownership position. Basically I get all the equity created by the BRRR strategy even though we both got our capital back. Does this seem fair?

Next is the question of the cash flow split.  50/50?  60/40? His stays fixed while mine increases over time?  How would you structure this?

I want to be perfectly clear here that it is not in any way my intention to be unfair to my friend in the least. I want him to feel like he's getting a win but I also want to be fairly compensated for my much higher level of involvement, expertise, and risk. I've just never done a JV before and could use some guidance. Thank you!