Question on how to structure a partneship

[Michael Olson]

Background: I am an aspiring investor (buy and hold) who has spent the last year studying up, getting my financial affairs in order, and saving capital. I am preparing to start looking for my first serious deal this fall. My long time and trusted friend recently approached me, he has capital he would like to invest and is interested in partnering with me in rentals.

Question: All of my research has been based on the assumption that I would be going this alone. Now my friend wants to form an LLC and go into business together. This is a very exciting development as he brings serious capital to the table and we could start doing deals very quickly, we could be much more aggressive than I could ever be by myself. That said, I don't know how to equitably divide up profits and losses. He would be bringing significantly more capital to the table than I would be, but that's it, I'm doing 100% of the work. I'm finding the deals, overseeing the rehabs, and acting as full time property manager. He already has a full-time job and runs a side business, not to mention he is not local. My question is, what are the best options for structuring this? How do you weigh the additional capital he brings to the table versus the sweat equity I'm contributing. At the end of the day we want this to be a true partnership. Any and all advise is appreciated.