.: Quote from @Theo Hicks: In ideal conditions:Pref equity receives higher ongoing distributions but no profits at saleCommon equity receives lower distribution and profit at sale (assuming their is cash flow left over after pref equity is paid and assuming their is profit at sale.In non-ideal conditionsPref equity may receive ongoing distributions less than pref, or no ongoing distributions at all, but the pref accrues.

So there is no discount or profit to be made. 

Take a look a look at the RPAWi. org, which is our local non-profit landlord association located in Milwaukee.

My current credentials:Bachelors of science in Enterprise regulation For-profit, Non profit (Fancy way to say business law) Currently Pursuing my MBA in Finance, expected to graduate in May,2025 Appraiser Trainee License in NYCurrently Managing a small portfolio of properties (family). 

Perhaps you can barter that for experience and, perhaps, a taste of the profits and then, later when you're capitalized, do what you're suggesting but now with experience and skin in the game.

I have found a few deals on the market lately for some clients that flip, the numbers still gave the flipper a profit and the rehab time was 5 weeks.

Even if your GC is decent was able to get your job done in 100 days, if it doesn't resemble the comps in quality then your 300k exit is now 270k and with all the exit costs and holding costs your 40k expect profit is now under 10k. 

I use the "profit first" approach to cash management and am VERY happy with what it has done for me. https://a.co/d/h16sPxR

Would I pay for all the remodel expenses and then 50/50 split of profits or does contractor pay remodel cost?

As someone who deals and talks to real Private Lenders (small shops run by a guy who lends his own capital and doesn't use big box), they have a hard and fast business model that produces the rate of return they need to remain profitable and curb the risk on their cash.So the best product for a budding fix and flip investor is the bridge loan which includes acquisition money and construction money.