Structuring a 3 way Partnership for Buy and Holds

[Matthew Reid]

Hello BP,

I was hoping to get some thoughts on how to structure a three way partnership that would look something like this. We are going to be buying multi-families that are in need of updating and the current rents are below market.

Myself- I would find the deals and help my construction partner upgrade the units. I would put half the upgrade costs in, my construction partner would put in the other half. I would also deal with the tenants.

My Construction Partner- He would do all the upgrading and manual labor that would need to be done. He would also plow, yard work, etc. He would put in half the upgrade costs. His labor would be "free".

Money Partner- I have a money partner that would like to feel a part of the action. He doesn't want to just be a private lender, he wants a say. I don't mind this because he's a great guy and he has deep pockets. He would put the principle amount in and my construction partner and I would pay for the repairs/upgrades.

I guess my I'm wondering what percentages would be far for each partner? For arguments sake we'll say we can't get private money without the lender having some sort of say. What kind of other role can my lender partner play so he feels part of it? Is this just to many cooks in the kitchen?

Thanks for any partnership info you can give.