Looking for a structure for our cash partner

[Michael Wentzel]

I am looking once again to the collective wisdom of Bigger Pockets.

We started buying run-down properties, fixing them up and then refinancing them to get most of our cash and down payment money back out of them. This leaves us with cash flowing properties and little or no cash left in each deal. I don't think this is a new strategy.

As of today, we have a friend who is willing to be a cash partner with us. Our thought is that we would take cash from him for the purchase and rehab of the property. Then when we refinance (estimated 2 months) we would pay him back with interest.

We are just wondering about structures investors have employed to execute similar strategies. Promissory notes? Partnership? LLC? I really am pretty ignorant in this area. I haven't even setup an LLC yet to hold these properties. I also want to create a system that is legal, protects both of us and is easy enough to replicate two or three times a month if we scale up the acquisition of properties.

I know there are probably threads out there that address similar topics. But I wasn't even sure what to search to find relevant information.

Mike