How to handle capital loan from relative

[Angie Hills]

Hi all! I mentioned in a post earlier that we are in the process of re-financing our house to get 10k equity out for starting capital to get back into REI and have a relative that is willing to 'loan'/'invest' around 20k.
The relative is my mother-in-law. My husband has been talking to her about it & she mentioned loaning the money & he told her he didn't want to borrow it he wanted her to be an investor. I'm not sure what the difference is/would be??? He said to me that if she 'gifted' each of us 10k we wouldn't have to pay taxes on it???
So - I'm asking for advise on using this 20k that she has to offer - do we 'borrow' it and just pay it back with X amout of interest? Do we offer her X% of the profits after sale of a rehab for 'investing'?
My husband thought about using the 20k and our 10k for partial downpayment, rehab costs, and to cover mortgage while rehabbing & vacant until it sells. Then giving her X% (he was thinking 20%) of the profits and re-using the 20k for the next project.
Any advice is appreciated...Thanks for all your help!