JV Partnership on Buy and Hold Apartments

[Leslie Schwab]

Hello Bigger Pockets!

I have several apartment building investments and am in discussions with a partner who is interested in putting cash into future deals.  He is willing to contribute 100% of the cash for the purchase and any required renovation (with no bank loan).  

I am trying to think creatively about how to structure the net cash flow splits and am liking the idea of a preferred return on his capital contribution and then a percentage split on remaining cash flows and on the net appreciation at sale.  I plan to take a reasonable fee for property management and also a commission when we sell a property.

The most important things to him are a reasonable preferred return and then the appreciation on the asset.  I care the most about the annual cash flow and, secondly, about asset appreciation.  

Can anyone provide advice on how you've structured these cash flow splits in the past?  Is there another creative option that I should think about which maximizes each of our goals?

Thanks very much for your thoughts!