Passive Partnership question

[Jason Brower]

question?

I'm formulating the idea of passive partnerships for essentially the BRRR method, generally for my grown children.

I know I can use a hard money lender or other financing, financing properties isn't an issue where we are in our journey right now. My wife and I would rather invest in helping people than getting the best deal for ourselves at all times.  Reputation at least to me is important.

Let me lay out my thoughts.

I know each deal is different and due diligence is required.

here are the assumptions, high level.

Partner and we each put in 50% of purchase price and repair.

Partner is not on the Title.

Purchase home for 20K

Repair is 20K

Lets assume for easy math the ARV is 80K, with my financier I can take out 70% on a HELOC or 56K

After paying our partner back his money and paying ourselves our initial cost we have 16K left.

Is there a general thought on % split of the 16K?  20/80?  50/50?  80/20?

Also the assumption would be that the partner would not invest effort or time into the project, only come with cash.

What am I missing?  On the contract, would it be appropriate to add the partner as first lien holder?  Is there generally a time associated or time limit?

Thank you for your thoughts,

Best regards,

Jason Brower