Finance Options for Multifamily Development

[Stephen Osterberg]

Hello, I'm looking to get into my first deal and I think Multi-family near my house would be the best way to start. I have developed a friendship with the contractor I'm using for work on my primary residence and he brought up partnering on an investment deal. There is always a shortage for rental units in the area and raw land is relatively cheap. He already has blueprints for a quad 3/2 each unit that we could just copy. I would like to buy a large enough lot to be able to build 1 or 2 more quads on the land down the line. If we partnered 50/50 and both paid the same initial investment would it be fair to negotiate a lower contractor fee he'd charge for the build? And what would be the best way to finance the build? We could come up with the capital for the land and 20-25% of construction costs so would it be better to get a construction loan then refi into a traditional mortgage once construction is done or should we try to finance the rest of the construction costs with a private money loan from friends/family and repay them once we refi into a mortgage? 

Thank you for your input!