Sweat Equity in Joint Venture

[Stephen C Gates]

I'm in the early stages of beginning a partnership with a partner who will be entirely funding the purchase of a multifamily property. My role will be to manage the property and be the "boots on the ground" as the other partner lives in a different state. We have discussed a basic arrangement whereby I would receive a % of rental cashflow as well as a % of ownership in the property for my role as property manager. I am the one who will attend showings, inspections, arrange for contractors & renovations, etc. with the expenses being covered by my partner.

I need advice on how to structure terms of the partnership. What is fair for both partners? My goal would be to provide property management for less cost than an established management company would charge. I am a licensed real estate salesperson in a different state than where the property is located, but have managed my own SF rental property for 8 years, and I believe I have the skill set to successfully hold up my end of the bargain. I don't want to short-change myself or my partner, with whom I would like to have a long and successful relationship in the future.

I'm eager to hear from anyone who has experience in such a partnership, including pros & cons.

Thanks!