As someone who's done this (borrowed from parents), here's my take on it. When I was starting my buy and hold journey, I shared everything I was learning with my parents, so they knew what I was up to, the risks involved, as well as the benefits. We have a very tight-knit family, I'm very close with my parents, we all trust each other - this is important. So the first thing they said when I told them it will take some money to get started was "let us help you".
This is when I decided that if I was gonna borrow from them, I wanted to structure this new business venture in a way that would benefit them. So I made them equity partners by creating an LLC with four members - myself, my wife and my parents. Everything we've been buying is held by the LLC, with roughly 90% of it financed by my parents. We had a verbal agreement that the first 5 years we would use all the profits to grow the portfolio. Now, here's where some people will look at me funny - we've yet to decide how we'll split the money when the time comes to start spending it. My goal is to grow the business to the point where everyone's living expenses would be covered, with my parents taking priority. They will be the first to get paid when we start taking money out and they will always be entitled to a large part of the LLC's holdings.
I don't know if this helps, because there is some ambiguity in our arrangement. Again, with our family being the way it is, nobody is worried about being short-changed. However, at some point we will have to sit down and spell out who gets what. Right now, there's an implicit agreement that everything we are doing is for the greater good of the family.
