How to structure money partners

[Frances Martinez]

Hey guys. I am doing a new construction flip in Atlanta Georgia and I have a few passive, money partners that want to invest with me, mostly a few coworkers and a family member. I would like to pay them a preferred interest rate on their money and a small bonus ($1000-$5000) at the end of the flip based on what they put in. I have no idea how that should be structured? I'm pooling funds and making all of the investment decisions. Am I looking at a real estate syndication or some sort of partnership LLC? How much should I expect to pay to set up a syndication?

[Dani Beit-Or]

Here's a protocol you can use or use as a template and make modifications. 

On distribution you can distribute funds as follows:

1. Return of principal investment 

2. X% (say 15%) of profit first goes to your money partners

3. $#### bonus to money partner ($1000-5000)

4. Y% (say 25%) of profit goes to you

5. Rest of profit divided 50-50 between money partner and you

My question to you is what happens if things do go according to the plan and more money is needed? even worse more is needed and all/some of the partners don't want to contrinute?