Cash Investor partnership questions

[Julie Wright]

I am a brand new investor- and have been for almost a year haha! I just haven't been able to get past this "analysis paralysis". However, I am determined to get my first deal in the next 2 months. I finally got my RE license this month, so now it's time to actually use it!!

So, here's the background- I have a family friend who is interested in investing in real estate with me. I need some guidance for how to set up our business. We will form some sort of business (LLC?). That business entity will purchase the properties.

My questions are this--

1) Should we set it up as an LLC or Corporation? Better worded--- what have you done if you have a partner? LLC? Limited Partnership? If it helps any-- he will be mostly hands off-- really only providing cash and approving deals. His son (attorney) will likely be a member/officer as well. He oversees his father's business dealings.

2) The way I intend to set this up is to borrow an amount (say $300,000) and flip a house. He'd get 8% interest payments while his money is in the deal. Then once we sell the property, we'd split profits 50/50 (for the first few deals), and then over time his percentage would go down. Does this sound reasonable? This is what we've basically agreed to, but I want to have more "eyes" on it. 

3) I have someone I'm considering hiring. She would help me find and get quotes from vendors. So I assume I'd need to pay that person out of my portion? And his son-- he wants to give him part of his half of the profits. So would pay his son (attorney) out of his portion. Hopefully that makes sense. Is this how it would work?

4) Is there a way to set this up the business that makes it more advantageous to him for tax purposes? For example, should he "loan" the money to the business, so that the business paying him back is not considered income to him? I do plan to talk with my accountant as well, but I thought I'd see if anyone here has recommendations for/against a certain setup.

5) Assuming all goes well- should we leave the money in the business to continue doing more flips? I'd love to flip a ton of houses and then start buying others with the profits then move on to BRRRR deals and scale from there.

6) So talk to me about cash out refi. I've researched a ton, but don't feel like I get a solid answer about it-- If we buy a property, it's renovated, rented out, etc... How does a bank decide whether/how much they'll lend on the equity for a cash out refinance? Do they look at my income? His income? The property's rental income? The LLC's income? I'm going to reach out to my lender as well- but again, just looking to hear others' experiences.

Thank you all so much for your help, BP fam!

-Julie