Working with a partner. Does it matter if he brings cash or a mortgage?

[Ben Bakhshi]

I approached a friend about partnering on an investment.
Basic terms are that he puts down the whole payment, gets 50% of income off the top, no other expenses, and on resale, he gets the original investment back first. I am responsible for all management, taxes, insurance, repairs. Upon a sale, after his original investment, I get money back for repairs/improvements. We split the remainder 50/50.

It makes clear sense when buying the home in cash and under an LLC.
What happens if he were to get a mortgage on the home?
I recommended that we try and get him a mortgage on the purchase so his returns can be higher on his cash invested.

What should I know about the deal if he were to get a mortgage? I assume he would then have to buy the house in his name, and then transfer the home into the LLC, which has some costs associated to it. I wont be able to qualify for a mortgage, so co-signing is not an option.

Should the terms of the deal change if he were to get a mortgage on the purchase?