Partnership Deal - Need Advice

[Bradley Hibbard]

My wife and I have found a deal and we're in contract. High level numbers look like this: 310k purchase price, 100k rehab budget to add a JADU and ADU. 8% CoC return. The plan is to Buy, Renovate, Rent. We are not planning to refinance.

I have a friend who would like to partner on the deal, and we have discussed building a long-term portfolio together. He does not qualify for a loan as he is currently unemployed (pending some interviews), so the mortgage will be under my wife and I. He has equity to cover 50% of all costs including down payment, closing and rehab. The idea is to do 20% down and split everything.

We bring: Found the deal, qualify for the mortgage, cash, rehab experience, property management experience, and it's in our hometown so we will manage the rentals.

Friend brings: Cash, relocating to help with rehab, background in accounting.

My wife and I currently live in our 3 unit house-hack, so we have some experience, but this would be the first time partnering. I should add that my wife and I have the equity to proceed with the deal on our own if we can't agree on how to split the deal with the friend. We'd like to purchase a SFH forever home in the near future, so our concern with putting the mortgage in our name is that our buying power will be reduced without getting the full benefit of the cashflow.

What's the best way to structure this deal and what is a fair split?