Creative Joint Venture Question. Long Term Capital Gains

[Chad Reed]

   I have a unique situation and I am hoping someone has an answer to help us with a joint venture.   I own a rental property that is in an area that is very hot and I would like flip the property.   I no longer live in the city so I am looking to joint venture with another investor in that town that I have known for a while.   The initial plan was to have me continue to own the house and therefore finance that side of the deal while he takes out a 100K private loan for the rehab.   Upon sale we would divide the profits.   The issue I am concerned about is that currently if I hold the title until the sale,  the profit would fall under long term capital gains for me.   If we were to transfer title and then he would begin the rehab, I would get taxed differently on equity split at closing.    He does not believe that he can get a loan without holding title.    I could charge him more for the home upfront but we would still have some settling at the end.   Any creative ideas would be appreciated.   Thanks