JV Structure??

[Derek T.]

How are most JV deals structured with other investors or HMLs? I talked to a HML about a JV deal in my area and his terms for the structure are.......

-Set up the property in a LLC
-He has 51% ownership rights in the LLC
-He also charges 4 points and 12% (that is rolled into the loan)
-So when the property is sold he will receive 51% of the profit along with the addition loan costs
-His contractor can do the work (he control the project) or my guy can do it but he would want to vet my guy

Essentially this would be a HML that won't charge any money upfront however on top of the regular HML fees, he would also get a 51% split in profits. At what point does using other people's money and not bringing your own money to the table become too expensive? He would be willing to bring his guy in and control the project but I am interested in performing on my first fliip as well. I just did a rental but this would be my first true flip so the incentive to use opm and their experience may be benefiical but at what cost?