Have someone else finance our deal?

[Tessa Rysztak]

DH and I are ready to start flipping houses, but trying to figure out financing.  Right now, taking out a mortgage isn't an option for us, and we don't have the cash built up to purchase something outright.

We have some close friends that have always been interested in getting into real estate investing, as well. One friend has plenty of ability to get a conventional mortgage, his DTI isn't tapped out, etc. So we are discussing partnering with him. He is out of state, and we would be doing everything but actually financing the property. We haven't ironed out all the details yet, such as what his take in the deal will be.

Will this work?  A couple of high level questions that have come up so far: How would we structure the deal?  would he just 1099 us for all the works and expenses?  Our profit would be from the work and whatever take we agree on would be left, and he would be taxed on that?

Or is this logistically not really an option?  I don't think I have read about anyone doing this before.