Creative Loan financing

[Tu Cao]

So my friend and I are planning to partner on an 800k property (my friend found the property).  My friend doesn't have the money to go half and half, but I have the money to buy the property outright.  I am thinking of two scenarios:

1. I just buy it, and let him manage the property and pay 10% of whatever fee (he doesn't like this route much).

2. Pay for it outright, but maintain the partnership, but I become the banker and charge him interest on the loan I give him (2% lower than the market)

What do you guys think?  Please comment.