Private lending terms

[Rich Thomas]

Hello all, My father and I recently reached and tentative agreement with a private lender who is a family member. Our main purpose will be to rehab and flip houses. My question is what is the best way to go about structing our partnership between us and our lender (family member). The lender would not be involved in the day to day operations and would serve more as a capital investment partner... #1. Should my father and I set up some type of LLC or do everything in our names? #2. Would we pay our lender back with a percent basis ie. 10% return, or say for example he will get 25% of the profit? Any and all info is appreciated! Thanks Rich