Forming a Partnership

[Stephen Beaudoin]

I'm working on a deal that is a cash buy where I'm working with a partner. He happens to be my brother, but it isn't really too relevant to the story. 

I'm just curious how everyone structures their partnerships and what the thoughts are on my current arrangement.

Neither of us had 100% of the cash to do this deal, however he is bringing more to the table. After a brief discussion, I had thought that it's beneficial to at least pay a return on the money dished out first before splitting the profit, just as as we would have done if financed. 

Our agreement is a quick 5% paid on the cash put into the deal. Then we will split the remaining profit 50/50. We factored this into the structure of our deal.

The idea is that no one gets bitter that they have bigger risks, because the rewards are weighted. Plus we both get to benefit from a deal we couldn't have pulled off on our own.

The approach seems to be working for us, but what are your thoughts?