unusual RE deal funding

[Mark Ormerod]

Here's the deal.

rental property is about 45k, currently rented 700 a month. We think we can get it to 900 in 2 years. Recently remodeled, new roof. But low income area so very hard to get a good PM to take on the PITA factor. Area is OK, not a warzone.

Tax and insurance is 1700 a year. 

Deal is structured like this. Partner 1 puts up the money to purchase. Partner 2 (part-time property manager, licenced) will be PM and run the rental. All net rents go to partner 1 (with no PM fee, just tax, insurance, maintenance) until purchase price recovered (estimate about 10 years). After that,  property is owned 50/50 and pays a standard PM fee to whoever is then managing it. 

Essentially, PM is earning their equity via doing the PM work. I think it helps align the PM with the equity provider to find good tenents and minimise vacancy and damage, when incentive is usually other way (PM makes money for finding new tenants and usually takes a piece of maintenance charges).

How would you value the deal for the 2 partners? What do you think of the deal?