Structuring a JV Deal

[Joe Onorato]

Hi all!

I'm bringing a partner in on a deal for the first time. We have been flipping for the past 18 months now in South Jersey, and have 3 deals going right now with all of our money tied up (we do every deal in cash to avoid bringing in a lender, etc). 

We just put a deal under contract yesterday and a partner would like to get involved. He has a greed to finance the full project (115 purchase, 35k rehab). He has been given our portfolio of past deals and feels comfortable with us. He is an experienced builder so he's letting me run the show to earn my keep, but asked me how I would like to structure the investment.

Does anyone have any advice or past experience with the best/fairest/easiest way to structure this? The two options I was going to throw out were:

He take out a mortgage/promissory note on the transaction with us and becomes 1st lien position

I wholesale the deal to his LLC to purchase and draft up an agreement to split the profits 50/50. Obviously more sound than this but that would be the general idea.

Thanks in advance!

Joe