Logistics of a 50/50 Partnership Deal

[Zane Lyons]

Hi folks,

This is probably a simple question, but I'm having a bit of trouble finding the exact layout of a 50/50 partnership logistically, e.g., title, loan, funding etc.

I am looking for my second value-add deal and found a partner who is willing to invest purely financially and split 50/50 if I find the deal and do the work to rehab and find tenants (or flip).

We have discussed some ballpark numbers, but I'm fairly certain he is willing and able to stretch it if the right deal comes along. He has a decent amount of liquid cash and mentioned he could pull out an equity loan if we really needed to buy something cash, but he will likely be getting a mortgage in his name.

My questions are mostly based around the logistics:

1. Do I need him to get pre-qualified for a second mortgage/vacation home mortgage/anything like this before I find a deal? Again I have ballpark numbers, but don't have a hard line of what he could get a mortgage for and not.

2. Assuming I find a deal and we both agree to it, do we then form a joint LLC, sign operating agreement, open a bank account etc. that he transfers money into?

3. I assume we put the deed in the LLCs name, but the mortgage would be tied to him directly. We have a good relationship, but he did mention concern about having the mortgage solely in his name while each technically having 50/50 ownership of the property. Hypothetically, were I to run off, I would still own 50% of the property and have no obligation to the mortgage... right? I would like to quell his fears about this.

Any other tips of the more banal side of structuring a deal like this would help me wrap my head around it.