Advice on partnership structure

[Jamie Douglas]

I have a few rental properties that I manage myself and have recently started buying foreclosures at auction to rent and hold. For me, the goal has been all about long-term investment and cash flow. I've been doing this as a secondary income up to this point, but am interested in making it my primary income.

A very close friend of mine has come to me wanting to supply cash for these deals. He is interested entirely in long term investment and doesn't care at all about cashflow. He also has much deeper pockets than I do. He wants to supply the cash but have absolutely no involvement in the purchase decisions or management of the properties and he has asked me to propose a structure to the arrangement and I care very much about being fair to both of us.

What I bring to the table:
Time
Experience with property management and property purchases
he values his trust in me a lot (he's had some money stolen from him in some previous poor choices)

What he brings to the table:
Cash

I am still interested in also also supplying some of the equity. I could put in 20% on about 10 more houses at this point...but he's also interested in doing more properties than that, at which point I wouldn't have the capital to contribute.

I'd love to hear your thoughts on how to structure this partnership. I certainly intend to work with an attorney on this, but right now I'm not even sure what I would propose.

Thanks