How to Structure Partnerships for BRRR

[Dave Bopp]

I am in the process of coordinating partnership structuring for a BRRR deal. I have a potential capital investor who is open to financing acquisition & rehab costs. I would be the general partner responsible for property acquisition, rehab management, tenant placement and property refinance.

To keep the partnership simple my proposition is to create a 50/50 equity LP in which the capital partner gets a 100% return of capital upon refinance and remaining capital left over is split 50/50 between both partners. Additionally, I would like to build in an 8% construction management fee at refi closing.

Does this seem like a simple and fair partnership structure?

Thank you!