Seeking advice on investor payout structure or profit share

[Anna M Hinton]

I have an investor who is willing to cover the down payment for a multifamily deal I have. After renovations and raising the rents the cash flow allows for the following profit share terms with the investor: 8% monthly interest payments for 5 years (this comes out to be 70/30 split of net monthly income after debt service and all expenses are paid), after which the investor would receive one balloon payment for the original amount invested. Questions—Are these fair/ reasonable terms? What should we do or what kinds of terms could we offer the investor during the first year when we’re not really cash flowing? Any thoughts on this structure and terms as well as alternative considerations are greatly appreciated!