How do you set up your deals w/ an out of state family investor?

[Jerry Mical]

Hello all!

As the title states, how do you set up your deals with an out of state family investor? Do you get everything written up by an attorney? Is the cost of an attorney worth it? Being that I am in Charlotte, NC and they are in Louisiana, are we looking at needing two attorney's to make sure we are covered in each individual state? 

Contemplating a BRRRR deal with my parents where they would essentially provide me a LOC with them and I would provide an 8% annual return. Ideally, I buy the property and complete the rehab with their money and then find a tenant and cash-out refinance to pay them back the principal and interest. It seemed pretty straightforward at first when we discussed the possibility. But now that I have a potential deal for two properties on the table, it feels like there is so much more involved. Questions that have arisen: Do we need an attorney involved? If yes, do we each need a separate attorney for each state? Would it be easier just to figure out some sort of equity split rather than this lender/borrower relationship? Are there things I haven't yet considered yet (I am sure a million things)?

It all feels like there is just so many unknowns as this is my second deal after my wife and I purchased our first rental through conventional financing with 20% down. I want to make sure we get this right legally, and I want to make sure all parties are satisfied in the full transaction. At first it seemed like a simple "Oh parents you can invest in your son and I can provide you with a return, what a fun and easy way to do business with family without having to argue back and forth on what color backsplash we get for the kitchen!", but has since delved deeper into unknowns and now I am looking for any and all feedback on your best practices for how you have accomplished out of state family investor deals.