Ideal split for a private equity deal

[Adam Yetter]

A colleague of mine and I are considering entering into an equity partnership. The strategy will be fix-and-hold single family homes. Colleague provides the cash, I provide the rest (deal analysis, negotiations, closing, repair planning and execution, management etc)

What I’m curious to get the opinion of BP on is what’s a reasonable way to structure the split of profits? I think including a preferred return into the operating agreement so as to cash out my colleague first if/when the property eventually sells seems good. We intend to hold these properties for at least 5 years, potentially 10-15.