Partnership Structure for BRRR deals

[Ben Smith]

Hi all,

I'm looking at investing in a BRRR deal with a friend/private money partner. I know that the typical way to use private money for a BRRR or a flip is usually just to borrow the money at a fixed rate of return and pay it back after sale/refinance. However, in this case I'd like to incentivize fully funding the deal by providing 50% of the whole deal to the money partner. I know this is possible, but I'm having a little trouble figuring out the specifics of ownership, profit distribution etc.

1.    Limited Partnership:   It seems that one way it could work from a profit distribution standpoint is to create a limited partnership, in which I am the general partner and the friend/investor is the money partner. In this case, how would ownership of the property itself work? If the partnership owns the property as an entity, would it still be possible to obtain conventional financing for the refinance? (I'm guessing no).

2.    Individual Ownership:   If I own the property individually, it would then be fairly easy/simple to obtain a conventional loan for the refinance. However, in this case, how would we handle profit distribution, especially in the eventual sale of the property?  Is there some sort of entity structure we could use for sharing profits while I still hold title as an individual?

3.     Tenants in Common:   If we own the property as tenants-in-common, is it still just as easy/simple to get a conventional loan for the refinance? And are joint bank accounts all that would be required for the accounting piece?