How does a Partnership work with BRRRR?

[Matthew Keller]

Hey guys!

I have some questions about a partnership when completing a BRRRR. This is a general breakdown of how the deal could work

Buy- I will find the deal, and we will both put money into the acquisition, my partner more than me.

Rehab- I have connections to a contractor and will manage and work on the rehab myself. My partner will finance the rehab.

Rent- I will screen and place tenants, and manage the property myself for the time being.

Refinance- My partner will use his good credit, DTI, and stable income to get a good loan while refinancing

Repeat

I just have a couple questions about the process:

How would dividing cash flow work? If we agreed to a 50/50 split, would we just sign an agreement and divide profit monthly? How would this work when filing income on taxes?

How would the refi work? The loan just goes in his name, and both of our names are on the title of the property? Would it just look as though I have nothing to do with that loan?

Would we need to form an LLC? Wouldn't this mean we would have to pay business tax? Also, the refi process would have to be for a commercial loan, and would cost us more. How can I make sure its a residential loan that we both benefit from?

I am new to investing, so any information regarding these topics is greatly appreciated. Thank you in advance for your responses and time.