Partnership return structure

[Stewart Morrison]

My wife and I partnered with a family member. We are working out how to fairly distribute the cash flow so everyone is compensated. We have never partnered before and have been talking about this with our new partner for years.

This is the deal:

345K SFH

100k from the partner, (68K DN Pymt, 32K rehab)

He is only an investor in the equation but wants to be a partner not the bank. Which is completely fine with us.

We are doing the leg work and daily management of the rental.

This is being used as a Sober Living House. Our first of hopefully many.

The cash flow when occupied will be in the neighborhood of $3500 to 4K with an 85% occupancy.

How would you structure the payout? The plan is to get this home seasoned and do a modified BRRRR moving forward to rinse and repeat.

What have you done in similar partnerships?

Thanks BP!

Stewart and Nanci