Negotiating a Partnership: What terms to set?

[Matt Hurley]

I am beginning a partnership with a friend. We're business partners in a separate venture and I know and trust him (we will definitely still sign an operating agreement for Real Estate though). He's motivated to join as an investor, but he can only be a credit partner. He's in a different state so he cannot have any involvement in property management or manual repairs. He also cannot add any cash for a down payment or continuing repairs/maintenance. He could however, be a co-signer on a mortgage and lower my down payment and my overall risk. Allowing me to get a duplex I could house hack as opposed to a 2 or 3 bed house and rent a room out to make my PITI.

So, what are some basic terms for setting up this partnership? What are equitable terms for both parties? This conversation was very clear with our other business venture, but drawing a blank with REI. Any thoughts appreciated!

(side note) I understand this is a bit property specific. We have no current plans of short term flips, we're shooting for longer term buy and hold rentals. Starting with a property that I will house hack for around 2 years, then moving on to SFH and potentially larger multi's. Sky's the limit.