Deal structure - small land development

[Christopher Lavery]

Hey guys, new here and looking for some advice on my first deal.

I have a homebuilder that I have worked with for years. He has built homes for myself and other family members. Together we found a land deal which will let us purchase a piece of land and build two homes on it to sell.  we look to roll any proceeds into the next deal, rinse repeat.

I would be supplying the money to purchase the land, and we have a couple options to finance the construction of the homes.  my question really comes down to the best way to structure the deal from my end. My goal would be to stay hands off and not get involved with my builders llc.  Here’s what I was thinking:

Loan my partner (builder) the money to purchase the land under a promissory note as a private lender.  Include a profit sharing clause and define how I would recoup the loan and share in profits down the road.  He would pay the profit sharing via 1099 MISC.  

I could also structure the loan/profit sharing agreement to be under my LLC rather than with me personally. Providing the money for the land from the LLC, Making the LLC the lender, and having the 1099MISC payments go back to the business.

I’m trying to keep this as simple as possible, ensure protections, and just do it right - while at the same time we need to act fast and get this land purchased fast.