Sweat Equity! How to earn equity in an LLC

[Dylan Perry]

I recently created a real estate LLC with a partner. My partner wants a sweat equity agreement to earn equity in the LLC for his time/labor. Has anyone done this before or have advice on the topic?

The LLC will operate out of state from me and I'll continue working my job for a W2. I am the contributing partner while the other partner is providing all the labor and footwork on the projects. Starting out, I'm going to issue a loan to the LLC instead of a capital contribution to protect my interest.

Any advice is always appreciated. Thank you in advance!