Uncomfortable with Partner's Offer to 'Manage for Free'

[Mike B.]

Greetings BP Community!

I'm preparing to make my first real estate investment soon and partnering with one of my best friends.  He's a very successful RE broker and owns over 90 rental units so he's also a pretty seasoned investor.  He has offered to help me find deals and analyze them - and since the investment would be out of state for me, has offered to manage the property for FREE (with the understanding that he would help find lower-maintenance properties which I assume be a little more expensive).  I assumed he would take a commission but the first deals would be so small, I believe he is going to just wave them as a favor to me.

Obviously a great deal from my standpoint but I feel uncomfortable with him doing all the work and not getting reimbursed for his time and effort - and he's essentially giving up a deal that he could take himself.  Well, perhaps he's more interested in finding the tougher properties for himself since he's local and easier ones to manage for me for free.

What would be the best way to structure the ongoing partnership?  Should I pay him a percentage of the rent?  Give him % equity?  Again, very good friend of mine and I'm looking for the following: 

- Protect friendship and ensure I am not taking advantage of the situation

- Give him motivation to continue finding deals for me

- Give him motivation to ensure the property is being properly managed

- Learn more about investing for myself and bring value to a long term partnership

Any ideas would be very helpful - structure, documentation, etc.

Thanks!
Mike