Seeking your advice on a deal - your help is much appreciated!

[Kate Lee]

Dear All,
I’m in the process of finding a rental property for either tax shield purpose for my regular W2 income or getting great cash flow if I can find such deals, and My friend came to me for an investment opportunity. She's been a real estate investor for a couple of years doing wholesale, fix-n-flips. I would like your advice on this deal. Please help me to analyze if this is a good deal, and if the split between my gf and me is fair. If the structure of this deal is not fair, how would you structure it? Your help is much appreciated!

Property Info:
This a house (2 Bd, 2 bath) with a store front in Northern CA. I'd have to get a commercial loan for this deal. The monthly payment is approximately $2,500, and the expected rental income is about $4,500. So our cash flow is about $2,000. We plan to do lease to purchase agreement with the renter with an option to purchase after 5 years (with 3% appreciation each year). And the tenant has to agree to put an upfront payment of $20k with the guarantee that $10k will be refunded to him if he purchases the property at the end.

My friend’s contribution:
1. She found the deal through her contractor.
2. She’ll secure the tenant.
4. She comes up with 50k down.
5. She manages the property.

My contribution:
1. I’ll come up with 100K down.
2. I'll borrow the loan under my newly formed LLC.
2. I’ll have my real estate attorney friend review the least to purchase agreement & the agreement between my friend and me.

Our Split:
1. Monthly cash flow – half and half
2. Equity – 60% to me & 40% to her
3. Tax shield if any – belongs to me

Your help is so much appreciated! Have a nice day!

Best Regards
Kate