?'s and more ?'s

[Tami R.]

I have done a lot of REI researching, studying, etc. We are in the middle of buying our first property for $28k (will rent for $550). We put $7k down so our loan is $21k.
My fiance and I have our own mortgage and he owns a const. company so fixing up houses is pretty easy for us/him. We don't have a lot of $$$ to put towards purchasing more houses so a friend of mine's fiance does investment and is willing to invest $$$ towards 7 rentals. We manage the rentals and get a kickback per year (avg. $1k per house). After 5 years we sell the houses and we split the net. We have no $$$ going into these properties just our time and sweat equity. Yes everything will be in a contract - we are all anal and professional about business. The one stipulation is that he prefers us not to buy any houses on our own... which my fiance is not thrilled about. He still would like to purchase one or two houses on our own per year.

How it works with the investor is:
For example the investor gives $300k
We get 7 rentals x $500 per month $42k per year ($500 is low and this is for 12 months and we know if having 7 properties all occupied for 7 months is VERY unlikely.
He gets 12% of the $300k ($36,000k per year) and we split the difference.
After 4-5 years - we put all the properties on the market...
and say we sell everything for $500k - he would get the $300k he put in and we would split the net 50/50

What do you guys think.
This is not a person I found online or through the phone... I know him and trust him but wanted other opinions.