How to structure a partnership for BRRRR

[Nick Phillips]

I'm partnering with a handyman/contractor that is an extended family member.  He has 5-10 years of experience and knows quite a bit about general contracting even though he is younger.  Above all, I trust him and we are going to work on projects together.  I feel that he can learn a lot and grow through multiple projects. I would bring the funding and knowledge to acquire properties and he would do the leg work and manage other sub contractors. 

The main question I have is what would be the best way to structure potential deals so he also gains from the potential upside? I want his goals to be aligned with min - profit. Keeping costs low while easy ARV increases a priority.

There's a few options so far that I can think of: 

- Hourly pay + upside (what would be an ideal percentage?). For the percentage, I'm thinking between 20-50% however I'm not sure where would be the best split.  

- Treat just like a GC and have him bid on the whole job? He doesn't have much experience with estimation for a major house flip though.  Also, this method doesn't align with my goals, He would be looking at making profit on the reno and not on saving costs too.  

Also, how would you pay someone on the upside for a BRRRR? Would this be determined at the refi stage where we would take the ARV minus purchase price, costs, etc.

Appreciate any help here.