Deal analysis

[Mike Tacchella]

I'm brand new, this is my first post.  I'm an investment advisor in the midwest and have a good friend who is a builder.  He came to me with an opportunity that I wanted an extra opinion on.  I run numbers all day and every way that I look at this it seems to make sense but I want to make sure I'm looking at it right.  

He is offering to build a duplex at cost, basically using my money, and in exchange for the use of my money he'll be a 50% partner and manage the properties.

We'd be building 2 duplexes, but here are the numbers for each one:

I put $75k down.

When its finished it should be valued at $350,000.  Cost to build will be roughly $275,000.  I would, at close, take out a loan for 75% of the value, or $262,500.  $62,500 would go back to me (return of part of my initial $75,000 investment).  I'd then have a "net" $12,500 invested.  My friend would come up with half of that amount, $6250, and "buy-in" with that.  So we'd each by in for $6250 (estimated, obviously).  We would have used my money and his building skills.  Rent in this area should be, consveratively $1400-1600 per side, so $2800-3200 per month.  The mortgage would be $1350ish per month, plus about $600 per month for taxes and insurance.  So about $2000 in expenses and $3000 in income, netting (before anything unexpected) $1000 per month, which we would split.

The property would be owned by an LLC, in which we are 50/50 partners.

What do people think?  What questions do I need to be considering here.  It seems like a no-brainer to me at this point to let him use $75k for half a year, then get most of that back and only have a net investment of $6500 generating $500 per month for me (half of the 1000).  I would of course be on the hook for my half of the debt but I also have the benefit of we'd owe $262500 on a property appraised at $350,000.

Thanks for any thoughts!