potential partnership: Is this type of arrangement known?

[Bo A Vanecko]

Hello,

I was recently at a local neighborhood get together and long story short met someone who is quite active in investing (15 plus years experience) and proposed a passive partnership that I could also learn from as he pitched it.  All specifics havent been worked out but wanted to see if this type of "partnership" is heard of or what others thought.

Basically they have a home they are earning some good CoC on and what they would like to do is offer up my putting in most of their original investment costs (say for arguments sake 30K). In return I would get a passive check of 10% CoC on the property. They would keep the other CoC they are earning. (example...they are currently 18% CoC and by my providing 30K i get 10% they get the 8% as a "management fee" so to speak). I technically do not have to manage the property at all but they offered to have me shadow them to learn from this as well.

we also discussed my getting an equity stake in the property ...say 60% and they retain 40% equity should there be a sale down the road or any HELOC or refi etc.

also discussed were buy out terms should I want my initial cash out to move on etc.

anyone ever have deals like this?  thoughts?  

thanks,

Bo