How To Protect Your Investors Interest In Real Estate

[Austin Elm]

I was wondering if anyone could offer advice/strategy on how to bring an investor on board and provide them with a guarantee on the secondary position of a financed deal on a property. Basically I have identified a few properties and don't have the cash position to make a down payment on an offer, hence the need for an investor. I'm looking to bring in family/friends as investors but they need a "guarantee" that their dollars have secondary rights to the property in case of the deal going sideways (behind the bank). Creating a LLC as partners has been discussed but I'm curious if anyone has experience as to how to bring on an outside investor and give them secondary position to the property (behind the bank and before my interest/ownership). It has been discussed to be be 50/50 in terms of LLC ownership. Also, other entity setup is welcomed. Is this arrangement something that we can simply include in our operating agreement? Any suggestions would be appreciated.