Two Possible Agreements - Thoughts?

[Jon Catterson]

I'm not sure if this is the right sub-forum for this. If you can tell me of a better place, I'd appreciate it. 

My girlfriend and I want to employ the BRRRR method to invest. Unfortunately, we don't have much cash nor do we have any experience. My first question is how much experience are private and hard money lenders looking for?

Beyond that, my friend is always looking for opportunities to invest. We each proposed a way to operate as partners. 

My proposal: He provides all the money for the purchase and rehab. My girlfriend and I do all the work. He gets his initial investment back plus 34% of the cash out refinance. When I first stated this proposal, he thought I meant he would additionally get 34% ownership of the property and therefore 34% of the cash flow. He said he wanted to be involved in the decision making at which point I said more for him was fair in my opinion.

His proposal: Each party initially owns whatever percentage of the money they initially invested. My girlfriend and I also get more percentage based on finding and working deals. We also get 5% extra for being more active in managing the day to day needs of the investment. He did not yet have input for what to do at the the time of the refinance. He was willing to lend a portion of the house to us (its value) on which we would pay interest until that loan was paid back to him, presumably after the cash out refinance. 

Those are the two deals. Are either of these fair? What would you do if a friend with money could become your partner in REI? Thank you in advance.